Progress Qatar (English) 2014 - 2015 by Oryx Group of Magazines

2014-2015

THE EMIR HH SHEIKH TAMIM BIN HAMAD AL THANI

THE FATHER EMIR HH SHEIKH HAMAD BIN KHALIFA AL THANI

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PRESENTATION

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FOREWORD PLUMMETING OIL PRICES, OPENING OF THE NEW INTERNATIONAL AIRPORT, RECLASSIFICATION OF THE QATAR STOCK EXCHANGE FROM FRONTIER TO EMERGING MARKET, RESTORING TIES WITH THREE GCC COUNTRIES, BESIDES GETTING A CLEAN CHIT FROM FIFA TO HOLD THE WORLD CUP IN 2022, WERE SOME OF THE MAJOR DEVELOPMENTS THAT MARKED ANOTHER TUMULTUOUS YEAR FOR QATAR IN 2014. Though oil prices dropped to their lowest since 2009 and impacted the global gas markets, this did not deter Qatar from going ahead with its infrastructure projects estimated to cost more than QR1 trillion ($280 billion). Government agencies such as Kahramaa, Ashghal and Qatar Rail invited tenders for several major projects, showing the country’s resilience in absorbing the shock. The much-awaited inauguration of Hamad International Airport in April 2014, which is expected to cater to the needs of 30 million passengers per year, has certainly eased travel woes and already served more than 13 million passengers in the first six months of its operations. Initially, while the upgrade of the Qatar bourse raised hopes for more foreign investments and IPOs, it did not happen as only one company came out with an IPO. However, with Saudi Arabia also initiating market reforms, Qatar and other GCC countries can look for an inflow of funds into their markets. The political landscape witnessed major developments with three GCC member nations – Bahrain, Saudi Arabia and the UAE - recalling their ambassadors to Qatar but they returned by the end of the year after the tension was doused through talks and agreements. At the same time, relations with Iran also strengthened further with both countries promising to support each other in economic development. The healthcare sector received a boost with the government allocating QR15.7 billion for developing infrastructure like hospitals and health centres, and two of the 39 health projects have been completed so far and others are in various stages of progress. The success story of Qatari banks continues as they registered a robust asset growth during the year due to increased public spending, stronger asset quality and higher profitability coupled with capital adequacy ratios. This has helped in further consolidation of the country’s economy. In the run-up to the FIFA World Cup in 2022, Qatar won the U-19 Asian Football Championship held in Myanmar, the GCC Cup for the third time, and also defeated Australia for the first time. On the other hand, major international events were also organised during the year. To cap it all, the graft charges levelled against Qatar were dismissed by FIFA investigators. The Progress 2014 issue brings to its readers all major developments that Qatar has witnessed during the year. 9

CONTENTS

OVERVIEW INFRASTRUCTURE LEADS GROWTH

Qatar’s QR1.1 trillion ($280 billion) infrastructure programme has now entered the next phase of growth triggered by massive investments and the resultant latent demand for materials and services.

ECONOMY

17 CORPORATE QATAR

ON A STRONG WICKET

THE BIG LEAP FORWARD

Aided by expansion in lending to the private sector, Qatari banks continued their march on the path of progress for yet another year, boosting the country’s economy and also posting an impressive growth during 2014.

INFRASTRUCTURE

Home-grown companies are taking the next big leap forward by going international. Whether it is oil and gas, petrochemicals or power, the key to sustained growth is to explore opportunities in other countries. Having invested a decade to develop capacities within Qatar, it is now time to diversify beyond the country’s borders.

ZONES OF PROSPERITY

Work on the three economic zones that are coming up in the country is going at a hectic pace and the first of two phases of them is expected to be ready by March 2017.

ON THE MOVE

It has been an action-packed year for Qatar’s Public Works Authority (Ashghal). Work on a slew of highprofile programmes designed to address Qatar’s infrastructure needs took off.

SUPPORTING GROWTH

Qatar General Electricity & Water Corporation (Kahramaa) has a massive task at hand - to ensure the smooth supply of power and water to keep up with the growing demands of the nation. Qatar has pumped close to QR60 billion in the last decade sprucing up the utilities sector to support massive growth.

NEW PROJECTS ON THE BLOCK

The multi billion-dollar infrastructure build out has created demand for several ancillary construction requirements.

ON THE RIGHT TRACK

The QR127.4 billion ($35 billion) Qatar Integrated Rail Network comprising three projects – the Doha Metro (Metro), Lusail Light Rail Transit (LRT) and the Long-Distance Passenger and Freight Rail (LDPF) – is chugging along to meet its delivery deadline in time for the FIFA World Cup 2022.

SKY IS THE LIMIT

Zooming land prices, higher rentals and more project launches in the affordable segment have been the key trends that dominated the real estate sector in 2014.

ANOTHER MILESTONE

Qatar’s infrastructure makeover crossed a significant milestone in 2014 as the much-awaited Hamad International Airport (HIA) finally opened to the public on May 27 after a soft launch a month earlier.

QATAR AIRWAYS - UP, UP AND AWAY

It was a journey that started two decades ago in the quest to put Qatar on the aviation map of the world. Today, Qatar Airways, the national carrier, has successfully taken the country to the skies.

CONTENTS ICT AND TELECOMMUNICATIONS

DIGITAL FUTURE IS HERE

In tune with the goals set by Qatar National Vision (QNV) 2030, the Ministry of Information and Communication Technology (ICT) sector made rapid strides moving towards a digital future in 2014.

GLOBAL OUTLOOK

QATAR-IRAN TIES GET A BOOST

Unrest in the wider Middle East region, falling oil prices and also the thawing of frozen relations between Iran and the world powers are among the reasons that have brought both Qatar and Iran much closer than in the past in the last few months.

PARTNERS IN PROGRESS

Qatar and Germany have been working together ever since both countries established their diplomatic relations four decades ago.

SOCIAL DEVELOPMENT

EDUCATION HOLDS THE KEY

Quality education is the fundamental pillar of human development and an essential ingredient to sustain Qatar’s legacy and its wealth.

HEALTH IS WEALTH

In less than a decade from now, Qatar plans to offer full-fledged healthcare services to its residents.

TOURISM AND CULTURE

107

A CULTURE OF ART AND LEARNING

HE Sheikha Al Mayassa bint Hamad Al Thani, chairperson of Qatar Museums (QM), was named one of the world’s 100 Most Powerful Women in Art by a leading international art industry website in 2014. She has been instrumental in steering QM through another eventful year.

LABOUR REFORMS ON THE ANVIL

Asian workers toiling in punishing temperatures only to return to their stuffed and filthy quarters is the oft-repeated picture of workers in Qatar, one reads in the Western media.

CSR AND ENVIRONMENT

IN THE RIGHT DIRECTION

Achieving economic prosperity by utilising the vast oil and gas reserves in the country without degrading environment should not only be done but also seen and Qatar has been in the forefront than any other country in the region in making public the sustainable development reports.

A “RESOURCEFUL” WASTE

Qatar’s economic growth is unmatched in the world and so are its huge mounds of solid waste, a result of rising income levels, rapid industrialisation and urbanisation, increasing standards in living and also population explosion, if statistics for the last few years are any indication.

OVERVIEW

“WE ARE CURRENTLY FACING A DECLINE IN OIL AND FUEL PRICES AT THE WORLD MARKET LEVEL. THIS IS NOT THE PLACE TO DISCUSS THE REASONS FOR THIS, BUT I WOULD LIKE JUST TO EMPHASISE THAT OUR ECONOMY IS STRONG AND SOLID AND WILL NOT BE AFFECTED BY SUCH DEVELOPMENTS, AND OUR BUDGET IS BASED ON VERY CONSERVATIVE ESTIMATES OF FUEL PRICES.”

HH SHEIKH TAMIM BIN HAMAD AL THANI THE EMIR STATE OF QATAR

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PROGRESS 2014-2015 OVERVIEW

INFRASTRUCTURE LEADS GROWTH QATAR’S QR1.1 TRILLION($280 BILLION) INFRASTRUCTURE PROGRAMME HAS NOW ENTERED THE NEXT PHASE TRIGGERED BY MASSIVE INVESTMENTS AND THE RESULTANT LATENT DEMAND FOR MATERIALS AND SERVICES.

everal mega projects in the transport, water, electricity and real estate segments have picked up pace, pushing inflation up. Growth from the hydrocarbon segment has stabilised after a decade of large-scale expansion. The slide in global oil prices by more than 50% since June last year due to the glut in the market and weak demand is a cause of concern for many countries in the region. However, Qatar is well positioned to handle the slump as its annual budget for 2014-15 was based on a conservative oil price of QR236.6 ($65) a barrel and is expected to end the financial year with a surplus revenue of QR7.3 billion. According to Qatar News Agency report, The Emir, HH Sheikh Tamim bin Hamad Al Thani, who patronised the opening of the 43rd ordinary session of the Advisory Council in November, also said: “We are currently facing a decline in oil and fuel prices at the world market level. This is not the place to discuss the reasons for this, but I would like just to emphasise that our economy is strong and solid and will not be affected by such developments, and our budget is based on very conservative estimates of fuel prices.” In its latest report “Economic Insight: Middle East” for Q4 2014, the UK-based Institute of Chartered Accountants in England and Wales (ICAEW) said that Qatari GDP contracted on a quarterly basis during Q2, with strong growth in nonhydrocarbon activities only partly offsetting a slowdown in the oil and gas sector. “Annual growth is expected to amount to 6.3% this year, rising to 7.2% in 2015. This forecast which assumes that announced infrastructure projects proceed as planned is set

to be supported by a continuation of brisk and broad-based growth across construction, financial and business services, and tourism. Intensive capital investment will buttress GDP expansion across the medium term, even at lower oil prices,” the report said. LNG PRICES STABLE Currently, the current account surplus is estimated to be roughly 16.7% of GDP in 2014, down from 30.9% in 2013. This decline was partially due to lower export volumes, particularly of Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGL), which together accounted for an estimated 70% of total exports in 2014. Lower exports of gas were driven by lower production as some of Qatar’s 14 gas liquefaction plants were closed for maintenance. Meanwhile, LNG prices have stayed relatively stable from an average price of QR61.15 ($16.8 per million) British Thermal Unit (MMBTU) in 2013 to an average of QR61.88 ($17) MMBTU in 2014 (January-July). “Oil prices on the other hand have declined in recent months. But this is not likely to affect Qatar very strongly in the near term for two reasons. First, oil is currently expected to be only 4% of exports in 2014. Second, Japan (Qatar’s main export market) is likely to keep importing huge amounts of LNG as it has closed down most of its nuclear power plants and has increasingly moved towards LNG,” the report said. On the import side, Qatar has seen an increased inflow of materials, equipment and, to a lesser extent, food. “Going forward, we expect imports to keep increasing as demand for materials, services and food keeps increasing due to further development of large infrastructure projects and

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an expanding population. Combined with relatively stable expected exports, we expect a further decline in Qatar’s current account surplus, although it will likely remain at healthy levels,” the report added. OIL PRICE SLUMP IMPACT A sharp slide in global oil prices from above QR364 ($100) to less than QR167.44 ($46) has sent shock waves round the world. Qatar also needs to worry as natural gas - its main source of income - is indexed to oil prices. Riding high on oil prices, Qatar has enjoyed huge surpluses for the last couple of years. The fiscal surplus in FY2013-14 was estimated at 12.6% of nominal GDP and 11.2% the previous fiscal year. These surpluses have been invested in assets abroad to provide for such situations. According to thMinistry of Development Planning Statistics (MDPS) 2014-15 Economic Outlook report, Qatar’s investment income from abroad rose to around 3% of GDP in 2013, up from 1% in 2009. The country’s current plans will not be affected as its budget takes a conservative base oil price. According to Qatar National Bank (QNB) report, the fiscal breakeven price – the oil price at which government expenditure would equal government revenue – was QR243.88 ($67) a barrel in 2013. Even if oil prices fell below QR243.88 ($67), they would have to remain depressed for some time to have an impact on the investment programme. Qatar has the resources to draw on before being forced to make any significant cutbacks to domestic investment. “However, should oil prices remain low for a considerable time a prioritisation process is likely to be implemented to ensure the completion of the key projects,” the report said. The GSDP also warns: “Significantly weaker oil prices and escalating domestic project costs could cut into fiscal surplus in the long term.” HYDROCARBON GROWTH PLATEAUS The output from the hydrocarbon sector has plateaued following a massive expansion programme over the last decade. According to Qatar National Bank (QNB), contribution from the hydrocarbon segment declined 2.2% year-on-year as a result of lower crude oil production and temporary gas production shutdowns. Most plants are running at full capacity. Further output increase will happen when the Barzan Gas Project comes on stream next year. According to reports, output from the hydrocarbon sector is set to contract by 2.5% in 2014. Gas output is expected to be largely unchanged in 2014, having saturated capacity in 2013. In 2015, however, the output will expand by a modest 0.5% as the lift in gas production from Barzan more than offsets the continued decline in oil output. There is, however, immense growth potential in the

expanding petrochemical sector. Qatar plans to double its petrochemical output over the next decade. With the Al Sajeel plant now on hold, there may be changes to the plan. Weak global petrochemical prices, upcoming capacities across the globe and Qatar’s own dwindling cost benefits from new plants have changed the equation. GSDP predicts overall economic growth to moderate at 6.3% in 2014 before picking up to 7.8% in 2015. CONSTRUCTION TO PEP GROWTH Qatar’s investment focus has shifted from oil and gas to construction and transport as it gets ready to host the 2022 FIFA World Cup. The country will enter into a new phase of build out as master plans get converted to concrete structures over the next decade. According to QNB, projects worth QR662.48 billion ($182 billion) are to be implemented outside the oil and gas sector over the next five years. The largest projects include several major real estate developments like Lusail, The Pearl Qatar and Musheireb, a new metro and rail network as well as new roads and highways. In the near to medium term construction activity is expected to propel growth. ARCADIS Global Infrastructure Investment Spending Index measured 41 countries with the greatest potential for infrastructure investments and ranked Qatar the second most attractive infrastructure market in the world after Singapore. Doha-based Al Khayyat Contracting and Trading CEO, Mohamad Moataz Al Khayyat, said that state spending alone has been estimated to reach QR582.4 billion ($160 billion). However, additional investments will pour in from the private sector to complement what the government is doing to boost infrastructure development in the country, he said. “Preparations for the 2022 FIFA World Cup, though a government-driven activity, will also see external investments being made outside state funding to cash in on the windfall expected from staging the world’s biggest sporting event. The retail industry will open up, as will the F&B sector. Tourism and hospitality will see further activity, beyond what the government is planning,” he said. “In the Gulf region, Qatar leads all other nations and has maintained this ranking for the past two years - an affirmation of investor confidence in the country’s potential to attract investments over and above what the state will spend,” Al Khayyat added. According to Meed Projects, QR81.9 billion ($22.5 billion) worth of contracts have been awarded for the nine months ended September 2014 and could touch QR109.2 billion ($30 billion) by December end. Ashghal has awarded contracts worth QR5.5 billion on December 3 for various infrastructure projects. The execution of mega projects will create lateral demand for

PROGRESS 2014-2015 OVERVIEW

THE MOST ATTRACTIVE COUNTRIES FOR INFRASTRUCTURE INVESTMENT IN 2014

NORWAY (=)

SWEDEN (=)

CANADA (-1)

UK (+3)

USA (+3)

UAE (+1)

QATAR (=) SAUDI ARABIA (=)

MALAYSIA (=)

SINGAPORE (=)

AUSTRALIA (-1)

products and services and give manufacturing a boost. Qatar is gearing up to meet the demand for construction materials such as cement, steel and various other products locally. Large housing complexes and labour accommodations are being built to house the increasing population. The logistics sector is also gearing up to meet the needs of transporting and storing materials required. The government has announced plans for three logistic hubs outside Doha to cater to smallscale industries. The large influx of expats to work in the infrastructure segment will create demand for goods and services and increase trading activity. The trickle-down effect is expected to keep up the near-to-medium term growth momentum in the non-hydrocarbon sector. A QNB report said that Qatar’s non-hydrocarbon sector continued to drive economic growth, supporting the diversification of the country’s economy. “Real GDP growth accelerated to 5.7% in Q2 2014, from a revised 5.4% in the previous quarter, the report said quoting figures released by the Ministry of Development Planning and Statistics (MDPS). The non-hydrocarbon sector accounted for 49% of

source: EC Harris

GDP in Q2 2014, compared to 46% a year earlier. The nonhydrocarbon sector grew at an impressive rate of 11.3% for the same period due to heavy investments in infrastructure projects and rapid population growth. The GSDP expects construction activity to expand by 14.1% in 2014 compared to 13.6% in 2013, and to accelerate a shade faster in 2015, registering the highest growth among all sectors. POWER SECTOR The Qatar General Electricity & Water Corporation (Kahramaa) signed many electricity network expansion project contracts worth QR7.7 billion with a number of local and International companies for Phase 11- Qatar Power Transmission System Expansion Plan in May 2014. These projects involve contractors and consultants for transmission and distribution infrastructure development to implement through appropriate international and local private EPC participation. The EPC (engineering, procurement and construction) contracts for Phase 11 are for the supply and commissioning of transmission lines and substations

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In the Gulf region, Qatar leads all other nations and has maintained this ranking for the past two years - an affirmation of investor confidence in the country’s potential to attract investments over and above what the state will spend.” MOHAMAD MOATAZ AL KHAYYAT Chief Executive Officer Al Khayyat Contracting and Trading

along with dismantling of a few OHLs. PRIVATE SECTOR BOOST Though private sector growth has, so far, been largely statetriggered, the government expects the private sector to actively participate in the country’s growth. Several measures have been announced to open up opportunities for private sector participation. Tourism and logistics are sectors that will be developed further. The opening of Hamad International Airport in May 2014 has boosted a range of logistical and service-support activities. Qatar Development Bank has identified specific sectors and export opportunities where Qatari companies can participate. It has also been providing consulting services and financial support for start-ups. To ease out finance availability for the private sector the government directed public sector undertakings to get approval from the Finance Ministry before taking loans. Several rules and regulations have been eased to create a conducive environment for private sector participation. On the knowledge front, Qatar Science and Technology Park (QSTP) has been fostering a research base in the country. Through investments in research and education, the government is laying the foundations for a knowledge economy that could serve the future. GSDP notes that though there are evident signs of diversification there is little evidence of the economy becoming knowledge based. It said: “Increased demand for workers is still concentrated in lower-skilled occupations conditioned by the occupational structure of construction and some service subsectors that account for a substantial component of growth. The share of highly skilled workers in the population actually declined between 2008 and 2012.” INFLATION The rate of inflation at the end of August 2014 was 3.8%, the highest among the GCC countries, according to a report

released by the Statistical Centre for the Co-operation Council for the Arab Countries of the Gulf (GCC-Stat). The annual inflation rates in the GCC region ranged between 1.06% and 3.8% and Qatar topped its GCC counterparts followed by Bahrain with 3.1%, then Saudi Arabia with 2.8%, Kuwait with 2.71%, the UAE with 2.42% and Oman with 1.06%, the Bahrain-based Gulf Daily News has reported. Compared with July 2014, the report said that the inflation rate rose by 0.7% in Qatar. The main categories in the price index that witnessed a steep increase were housing for Qatar (7.9%), utilities for Bahrain (5.4%), tobacco prices for Kuwait (12.42%), and culture and recreation for Saudi Arabia (10.9%), the report added. In 2013, inflation inched up to 3.1% from nearly 2% in 2012, mainly due to spiraling residential rents, utilities and other housing-related services. Moderate global food and commodity prices ensured imported inflation was curtailed. BUSINESS COMPETITIVENESS Qatar dropped three places to 16th rank in the World Economic Forum’s 2014-15 Global Competiveness Index report. The report assesses the competitive landscape of 144 economies, providing insight into the drivers of their productivity and prosperity. It cited macroeconomic stability, efficient goods and financial markets and a high level of security as positive factors. The report suggested that Qatar has to improve educational outcomes, foster ICT usage, open up foreign trade and reduce administrative barriers to set up businesses besides upgrade transport infrastructure to become more competitive. On the other hand, optimism among Qatar’s business community remained firm for the third quarter of 2014. The composite BOI for Qatar’s non-hydrocarbon sector stood at 39, the same as for Q3, 2013, according to the D&B Business Optimism Index for Qatar. Within the non-hydrocarbon sector, manufacturing was the most strongly optimistic for Q3 2014, backed by demand from new projects, an overall strong economy and a rising population. At 46, the BOI is 11 points higher than in the same period of 2013. Seasonal factors are the main cause for a sharp fall in the index for the Finance, Real Estate and Business Services sector. However, Finance and Insurance firms continue to have a stronger outlook than the Real Estate and Business Services segments. Overall, 61% of firms in the sector expect an increase in sales, 64% expect an increase in orders and 40% expect to invest in business expansion in Q3, 2014, the index said

ECONOMY

“AS THE WORLD’S LARGEST LNG SUPPLIER, REPRESENTING A QUARTER OF GLOBAL LNG SUPPLIES, QATAR’S PROMINENT POSITION IN THE GLOBAL ENERGY MARKET IS SET TO REMAIN FOR YEARS TO COME.”

HE MOHAMMED BIN SALEH AL SADA MINISTER OF ENERGY AND INDUSTRY

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BRIMMING WITH CONFIDENCE THE ADVENT OF SHALE GAS SHOULD NOT BE A SOURCE OF WORRY FOR QATAR AS THE GLOBAL DEMAND FOR LIQUEFIED NATURAL GAS (LNG) IS EXPECTED TO GROW FROM 237 MILLION TONNES (MTS) IN 2013 TO MORE THAN 465 MTS BY 2035.

owever, the falling oil prices may cast their shadow on the world’s gas markets if the remarks made by the Minster for Energy and Industry, HE Mohammed bin Saleh Al Sada, are any indication. “The oil and gas markets are interconnected and we can see the oil prices affecting gas prices too. There is a strong degree of variation on the spot prices in different regions,” the Minister said on the sidelines of the 16th ministerial meeting of the Gas Exporting Countries Federation (GECF) held in Doha in December. Qatar is aware of the changing scenario in the global gas markets and has initiated a slew of measures to insulate itself from the aftershocks by diversifying its global energy portfolio and also by identifying new markets. The state-owned Qatar Petroleum has a 70% stake in the Golden Pass LNG project in Texas, which was initially developed to supply LNG produced in Qatar to the US. However, following the US shale gas revolution, ExxonMobil, which is partnering with Qatar in the venture, has sought permission from the US Federal Energy Regulatory Commission to convert the existing import facility into a liquefaction terminal. The initial cost of the project is expected to be around QR36.4 billion ($10 billion) and the investment plans are expected to be finalised by the two companies in 2015. LNG POWER HOUSE Qatar, which is described as the LNG power house of the world, has been producing 77 MTs of LNG per year at its 14 gas processing facilities and has been supplying the same to 26 of the 29 LNG importing nations around the world. With 896 trillion cubic feet (tcf) of proven gas reserves as of today, Qatar has the world’s third largest gas reserves, after Russia and Iran

respectively. Qatar has maintained its position as the world’s largest exporter of LNG since 2006 and will continue to do so at least for the next eight to 10 years. Some 60% of Qatar’s revenues are from LNG sales but the government wants to reduce its dependence on hydrocarbon revenues and is diversifying its economic activities into non-oil sectors. Two state-owned companies – RasGas and QatarGas – have seven LNG trains each and two more trains are expected to be commissioned as part of the Barzan Gas project by June 2015 (see box). The US may cut down its LNG imports from Qatar after it starts producing shale gas in a couple of years from now but energy-hungry countries like Japan, which has decommissioned its nuclear energy programmes following the accident at Fukushima-Daiichi nuclear power plant in 2011, India and Far East nations will be looking to Qatar to meet their energy requirements and prosper. CHALLENGES FOR THE US Even if the US wants to become a leading gas exporting country, it has many challenges to face, the first and foremost being its own laws which say the government has to obtain authorisation to export LNG to countries that do not share a Free Trade Agreement with the US. While the LNG export projects in the US are mostly located along the Gulf Coast, providing a logistical challenge in accessing Asian markets, it will take not less than one month for an LNG vessel from the US to reach Japan via the Panama Canal whereas Qatar and Australia can do so in less than three weeks (20 and 22 days respectively) due to their geographical proximity to Japan. Due to this, the US must look at the markets in Europe and the Latam region.

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The Golden Pass LNG project

Another aspect in favour of Qatar is that, Russia stands alone after earning sanctions from the US and its allies for its actions in Ukraine and has very few friends in the Arab world after extending military support to Syria and Iran.”

The Asia-Pacific region has witnessed strong growth in demand for LNG during the past decade, which has doubled since 2005 and is expected to reach 320 MTs by 2025. The demand is not only from China and India but also from other countries like Vietnam, Philippines and Myanmar, Taiwan, Japan and Korea as their economies are maturing due to rapid industrialisation. NEW PLAYERS Some of the countries such as Australia, Canada, the US, Mozambique, Nigeria, Tanzania and Papua New Guinea, which are blessed with vast natural gas deposits, are pumping millions of dollars to explore the gas fields but it will take at least four to five years for them to join the big league of gas exporting countries. Australia, which has invested around QR728 billion ($200 billion) in creating LNG infrastructure, has exported around 23.3 MTs of LNG in 2013 , mainly to Japan, China and South Korea and has drawn plans to export more than 85 MTs by 2017.

However, Australia, which is among the leading coal exporting nations, is wary as its coal exports are declining with many countries reducing coal imports to bring down pollution levels. The other issue why the Australian LNG projects are costlier is the expensive labour costs, making it vulnerable in its efforts to upstage Qatar. The completion of new LNG projects also depends on the investments made, economic feasibility of the projects and, even if they are ready, the LNG market continues to be a sellers’ market as demand will outpace supply in the next decade. QATAR’S NEW MARKETS Qatar’s confidence in continuing its gas supplies stems from the fact that the burgeoning population in Asian countries such as China and India is expected to spur the growth for LNG demand in the coming years. The world population is expected to increase from 7 billion at present to eight billion by 2030 and half of this population growth on the Asian continent, according to reports.

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Besides Asia, many highly-industrialised countries in West and East Europe, which rely on Russia for their gas needs, are looking at alternative sources like Qatar, Australia and Papua New Guinea. These countries want to break the monopoly of Russia as the largest gas supplier to their region, as they are forced to buy the gas at the price that Russia decides. Russia supplies 30% of European gas requirements. Of this, 70% reaches the destinations through pipelines in Ukraine and any crisis in the former Soviet Republic will hit the gas supplies. In 2009, Russia cut gas supplies, affecting 18 countries in January, and again in June last year, as a price dispute between Russia and Ukraine disrupted gas supplies, causing immense trouble to people. Though HE Mohammed bin Saleh Al Sada has categorically told a German newspaper three months ago that Qatar has no plans to compete with Russia to supply gas to European nations, reports suggest that Qatar is negotiating with Poland to supply LNG through the latter’s LNG terminal under construction which is expected to be commissioned in mid2015. Many European countries do not have the infrastructure to accept LNG in major quantities and Poland could well become a hub for LNG imports once the terminal is completed. If other Baltic states also invest in developing LNG infrastructure, they could become possible gas markets for Qatar. The growing demand for LNG around the world has to be matched by augmenting the production of gas and Qatar is in the process of stepping up its production. The state-owned RasGas has claimed that Train 1 of its QR37.5 billion ($10.3 billion) Barzan Gas Project (BGP) is more than 95% complete and was rapidly ramping up for its first production of cleanburning natural gas in the first quarter of 2015. Work on Train 2 was also progressing well and expected to be completed by the middle of 2015. Once completed, the two trains will produce around 1.4 billion standard cubic feet a day (bcfd) of sales gas and combined with its other facilities production (LNG and sales gas), the BGP is set to make RasGas one of the largest single gas processors in the world with a production capacity of 11 bcfd (equivalent to almost two million barrels of oil). Another aspect in favour of Qatar that is Russia stands alone after earning sanctions from the US and its allies for its actions in Ukraine and has very few friends in the Arab world after extending support to Syria. The fate of laying a pipeline from Qatar to Turkey and onward to Europe has been hanging in the balance for more than three years due to the unrest in Syria and Iraq. If this project had been completed, it would have opened more markets for Qatar due to cheaper transportation costs

The state-owned gas companies - RasGas and QatarGas - have seven LNG trains each while another two would be added in the next six months as part of the Barzan Gas project. The seven LNG trains owned by RasGas have a total capacity of 36.3 million tonnes per annum (MTA) of LNG per year. While Ras Laffan (I) owns Trains 1 and 2 with a combined capacity of 6.6 MTA, Ras Laffan (II) owns Trains 3, 4 and 5 with a capacity of 4.7 MTA each and Ras Laffan (III) owns Trains 6 and 7 which produce 7.8 MTA LNG per year and are among the largest LNG trains in the world. Two more LNG trains - Train 1 and 2 of the Barzan Gas project - are expected to be commissioned in the first quarter of 2015 and Train 2 is expected to become operational by mid-2015. Once completed, the two trains will produce around 1.4 billion standard cubic feet a day (bcfd) of sales gas. Combined with RasGas’ other facilities production (LNG and sales gas), the BGP is set to make RasGas one of the largest single gas processors in the world with a production capacity of 11 bcfd. Established in 1984, Qatargas is the largest LNG producer in the world, with a combined production capacity of 77 MTA per year. QatarGas has seven LNG trains – known as mega-trains – of which four are the largest in the world, each with a production capacity of 7.8 MT. Since its establishment, Qatargas has developed several assets including Qatargas 2, Qatargas 3 and Qatargas 4 projects; the Laffan Refinery a dedicated fleet of ships; a regasification terminal and liaison offices in Japan and China.

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CHALLENGING TIMES AHEAD

BUILDING A VAST CHEMICAL AND PETROCHEMICAL INDUSTRY WAS THE FIRST LOGICAL STEP TO QATAR’S DIVERSIFICATION PROGRAMME.

atar has doubled its chemical and petrochemical output since 2007. At QR30.57 billion ($8.4 billion), the industry contributed 4.2% of Qatar’s Gross Domestic Product (GDP) in 2013. Qatar is the second largest exporter of chemicals in the Gulf, representing 17% of total Gulf Cooperation Council (GCC) chemical exports, according to the GCC Petrochemicals and Chemicals Association (GPCA). At a time when the manufacturing base for petrochemicals was shifting to the GCC countries, given the cheap feedstock advantage, Qatar rode the wave and started expanding. Though the sector holds promise, the industry needs to cross a few speed breakers to march forward. CHANGING DYNAMICS HIT PLANS Qatar had planned for a QR91 billion ($25 billion) expansion in the petrochemical sector to more than double the production capacity to 23 million tonnes. Planning began on two largescale projects, Al Sejeel and Al Karaana, and construction was to begin in 2015. But Qatar decided to go slow and temporarily put the Al Sajeel plant - a joint venture between Qatar Petroleum (QP) and QAPCO - on hold in September 2014. In a notice to the Qatar Stock Exchange, Industries Qatar, a QP Group company, said it was studying “a new downstream petrochemical

project that is expected to yield better economic returns.” Qatar had to revisit its original plans to take cognisance of the changing global dynamics. Speaking at the 9th Annual Forum, hosted by the GPCA, HE Dr Mohammed bin Saleh Al Sada, the Minister for Energy and Industry, explained what could influence the industry in the region. “As oil prices reach their lowest levels in four years, downstream economists have to re-evaluate their strategies. The impact of US shale gas on the competitiveness of our region’s industry is putting downward pressure on gas prices in the region and the emergence of coal-based polyethylene in China shows that the country is looking at alternative feedstock to develop their downstream sector,” he said. Asia – China in particular – is the key market for petrochemicals. As America becomes self sufficient, the country is expanding downstream to cater to the demand for petrochemicals in China and the rest of Asia. Secondly, lower oil prices could have a negative impact on petrochemical prices in the long term. Analysts are not ruling out sub-$60 level scenarios for oil in the coming months. As GCC countries, including Qatar, lose feedstock advantages to other emerging capacities, growth is not going to be easy. Speaking at the GPCA annual forum, Khalid Al Falih, President and CEO, Saudi Aramco said: “North American petrochemicals production will double in the next decade, giving capabilities to the US to be in markets that we thought were traditionally ours. European markets are closing down

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their inefficient plants. And China is changing as well... it is growing relatively slower, however, Chinese companies are looking at coal-to-chemical opportunities.” STAYING COMPETITIVE As dynamics change, challenges mount but there is scope for growth, think industry leaders. Al Falih advised on a coherent strategy to overcome competition that includes experimenting with mixed feedstock crackers, upgrading existing facilities, regional integration and multiplying the number of industry participants. “We, as an industry, need to focus on innovation. Growth is assured, but we also need to transform our operations in a way that will make us relevant and profitable 10, 20 and 30 years from now,” said GPCA Secretary General Dr Abdulwahab Al Sadoun speaking at the event. A report by McKinsey and Company, entitled “The GCC chemical industry: Maintaining global competitiveness in a changing environment,” suggests that GCC players have a number of growth options despite the less positive feedstock outlook and increasing competition. “Growth in the domestic market for commodity chemicals provides a natural opportunity,” it said. Qatar’s product mix is high on basic chemicals – about 22% – and low on specialty products that contribute just half a percent to overall production capacity, according to GPCA data. Products such as paints and coatings, personal care chemicals, and other specialties fall into this segment. Tweaking the mix in favour of specialty products could also help the GCC stay competitive, says the McKinsey report. “The broader product portfolio that GCC players are likely to embrace on the basis of liquid feeds will enable them to target the growing specialty market segment, much of which is currently covered by imported products. This segment could represent another QR18.2-25.5 billion ($5-7) billion in growth, if GCC players can build up the additional capabilities needed to serve it,” says the report. Moreover, exports to markets that are not developing capacity are still possible. That requires developing a strong marketing network and brand name, which Qatar is doing through Muntajat. “Muntajat was established in 2012 to consolidate the marketing, sales and distribution activities of the chemicals and petrochemicals subsector within a single company that could gain greater market power and establish dedicated expertise. Efforts like this have already helped consolidate the Qatar brand of products and capture 90% of the subsector’s output,” said the latest energy and industry sustainability report for 2013. Qatar inaugurated the headquarters of

Collaborating with some of the world’s leading experts on research projects focusing on olefins, polymers and petrochemicals has the potential to add further value to our feedstock, which could be strongly beneficial for QAPCO.” DR MOHAMMED YOUSEF AL MULLA Vice–Chairman and CEO Qatar Petrochemical Company (QAPCO)

Muntajat in The Hague and opened 14 new marketing offices across the world. Expanding downstream to develop the value chain is another strategy. For example, QAPCO and its partners established the Qatar Plastic Products Company (QPPC) in 2000 to support domestic production of products such as bags and plastic film, using the Low-density polyethylene (LDPE) and Linear-low density polyethylene (LLDPE) they produce. Through this venture, QAPCO has helped build a nascent plastics industry in Qatar founded on low cost and reliable supply. To take innovation forward, in May 2014, QAPCO partnered with US-based Materia to develop a new generation of valueadded products that can be produced from Qatar’s existing feedstock. Materia specialises in efficient feedstock utilisation and the extraction of specific petrochemical and chemical compounds using innovative technology. “Collaborating with some of the world’s leading experts on research projects focusing on olefins, polymers and petrochemicals has the potential to add further value to our feedstock, which could be strongly beneficial for QAPCO,” said Dr Mohammed Yousef Al Mulla, Vice-Chairman and CEO of QAPCO. To diversify its downstream assets and take advantage of upcoming capacities, Qatar is taking stakes in new projects in geographies closer to its market. Its downstream ventures in Singapore, Vietnam and China are a case in point. Staying ahead in the game is the key

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INVESTING IN THE FUTURE

WHEN QATAR INVESTMENT AUTHORITY (QIA), THE INVESTMENT ARM OF QATAR HOLDINGS, ANNOUNCED IN NOVEMBER 2014 THAT IT WILL INVEST QR36.4 BILLION ($10 BILLION) IN CHINA AND SIGNED AN AGREEMENT WITH THE STATEOWNED CITIC GROUP CORP IN CHINA, THE OVERSEAS INVESTMENTS BY QATAR’S SOVEREIGN WEALTH FUND (SWF) CROSSED QR55 BILLION ($15 BILLION) WITH INVESTMENTS IN NUMEROUS COUNTRIES THIS YEAR.

IA is said to be the world’s most aggressive investor and had always been looking at Europe and the Americas for investments but it now appears to have shifted its focus towards the East, particularly in growing markets like China and South Korea. Interestingly, Qatar and South Korea have agreed to set up a joint SWF to make more investments in the region during the visit of a high-level delegation led by The Emir, H H Sheikh Tamim bin Hamad Al Thani, in October,2014. Investments in China are not new as Qatar had already bought a stake in China’s e-commerce major Alibaba and also in Hong Kong’s retail chain Lifestyle International Holdings, in addition to its investments made in Agricultural Bank of China (Agbank) in the past.

“We have been investing in Europe. However, as a global SWF, we also need to diversify asset allocations and geographical location but we will continue in Europe, of course,” Ahmed Al Sayed, former Chief Executive of QIA, told media while explaining the Fund’s investment strategies at an investment conference in Beijing. QIA wants to invest between QR55-73 billion ($15-20 billion) in the Far East Asia region in the next five years and as part of its plans, QIA is expanding its office in Beijing for investing in China’s property, infrastructure and healthcare sectors. Although there are plenty of opportunities in the consumer, services and technology, media and telecommunications sectors, QIA is keen to make investments in any sector which is “quite promising.” QIA is estimated to have QR618.8 billion ($170 billion) and has been on a buying spree of valuable low risk and highly

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Germany. Not only QIA but other institutions like Ooredoo, Qatar Petroleum International, Qatar Diar and Katara Hospitality have also been acquiring assets in many countries in Europe such as Switzerland, France, Spain and Greece. With Qatar diversifying its economy and gradually reducing its dependence on hydrocarbons, return on overseas investments would come in handy to meet the budgetary demands in the coming years. In fact, the contribution of nonhydrocarbon sector to the GDP was put at 50.7% at the end of Q3 2014. According to a Thomson Reuters report, Qatar’s overseas acquisitions accounted for 45% of the Middle East’s outbound merger and acquisitions (M&A) activity in the third quarter in 2014. Qatar is followed by the UAE (25%) and Saudi Arabia (22%), the report says.

We have been investing in Europe. However, as a global SWF, we also need to diversify asset allocations and geographical location but will continue in Europe, of course.” AHMED AL SAYED former Chief Executive Qatar Investment Authority

profitable assets around the world for the last few years. The investments made by QIA include Barclays, Blackberry, The Shard, Heathrow Airport Holdings Limited and Harrods in London, Credit Suisse, Iberdrola in Spain, solar panel manufacturer SolarWorld, Volkswagen and Hochtief in

OPPORTUNITIES AND CHALLENGES Feeling the pulse of Qatari investors, global property agencies like the UK-based Chestortons have been offering mixed-use developments for them in London. In fact, Chestortons held an exhibition in Doha in mid-November, 2014 to detail the features of its Royal Wharf project to Qatari citizens. Efforts are also on by QIA to acquire a stake in Canary Wharf financial district owned by Songbird Estates in London. Several countries in Africa, Eastern Europe, Central America and South America also offer interesting opportunities. Stability being an important consideration for most institutional investors, the geo-political and economic

GRAPH FOR SOVERIEGN WEALTH FUND RANKINGS COUNTRY

SOVEREIGN WEALTH FUND NAME

Norway

Government Pension Fund-Global

$893

1990

UAE-Abu Dhabi

Abu Dhabi Investment Authority

$773

1976

Saudi Arabia

SAMA Foreign Holdings

$757.2

n/a

China

China Investment Corporation

$652.7

2007

China

SAFE Investment Company

$567.9

1997

Kuwait

Kuwait Investment Authority

$548

1953

China-Hong Kong

Hong Kong Monetary Authority Investment Portfolio

$400.2

1993

Singapore

Government of Singapore Investment Corporation

$320

1981

Qatar

Qatar Investment Authority

$256

2000

China

National Social Security Fund

$201.6

2000

Source: Sovereign Wealth Fund Institute Total figures are rounded to nearest tenth and updated up to January 2015.

ASSETS (IN BILLION)

INCEPTION

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situation will certainly be carefully analysed before an investment decision is made. Charbel Abou Charaf, International Senior Associate with international law firm White & Case, said that the opportunities are plenty for Qatari investors in the global market as the economies of numerous countries have started showing signs of recovery. Investing in the US, the UK or Western Europe is clearly becoming more competitive, given that the major institutional investors and private equity firms seem to have recovered from the crisis. “This is particularly true for real estate investments where it will be difficult for Qatari investors to obtain the same commercial (and legal) terms that were obtained a couple of years ago, with perhaps a few exceptions if an investment is made in countries that are still facing a rather difficult situation such as Italy or Spain,” Charaf said. However, emerging markets, on the other hand, are becoming increasingly interesting, although risks are obviously much higher than in developed markets. “Investments in emerging markets can be extremely challenging. We have been involved in a number of transactions in Asia and Africa in the last few years and investors and their advisors always look very carefully at a wide range of issues such as repatriation of profits, currency fluctuations, the level of state intervention, regulatory and tax,” he said. FOCUS ON EUROPE According to Charaf, Qatari investors have been investing heavily in Europe in general and particularly in the UK in the past decade. These investments were made across a vast number of sectors, including real estate, finance, industry, hospitality, energy and sports. The focus on the UK was particularly strong with investments in billions of pounds ranging from landmark properties in London to through strategic investments in the London Stock Exchange, Barclays Bank, Sainsbury and Camden Market. “Several factors played a role, in my opinion, in making the UK, and London in particular, the main focus of Qatari investors: London is one of the major power centres and economic capitals in today’s world, with several attractive investment opportunities. The UK legal framework is investorfriendly with a clear and tested legal system, which gives investors predictability, a very important factor in making investment decisions,” he said. The other reason is that the UK is closer to Qatar geographically than the Americas and most African and Asian countries, and is almost in the same time zone as Qatar, which makes business easier. Finally, a very significant number of

Investments in emerging markets can be extremely challenging. We have been involved in a number of transactions in Asia and Africa in the last few years and investors and their advisors always look very carefully at a wide range of issues such as repatriation of profits, currency fluctuations, the level of state intervention, regulatory and tax.” CHARBEL ABOU CHARAF Senior Associate White & Case

Qataris speak English and have a second house in the UK. “This being said, Qataris have also made important investments in other European countries, such as Spain, France and Germany, because these countries also offer what I just mentioned for the UK: attractive investment opportunities, the legal framework and the geographical location,” Charaf said. SECTORS On the nature of assets and the sectors in which these investments are made, Charaf says that, besides the energy sector, there are clear opportunities in the industrial sector, agriculture and telecom. For portfolio diversification reasons, investments in the industries of emerging markets could be interesting. For agriculture, the food security programme in Qatar will require sustained investments in the food production chain, and he expects this to target primarily emerging markets. “As for telecom, this sector usually requires significant capital investments and Qatar seems well placed to play a role in this field in emerging markets. Ooreedo’s presence in Myanmar is proof of that. For any transaction in any of these sectors, a careful analysis of the financial and technical aspects is a must,” he added

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The local market presented promising opportunities as there are many ongoing projects and the general environment had been very favourable. We are doing what requires to be done to contribute to funding these projects based on our policies and strategies. These help us to participate in the process of adding value to our national economy.” HE SHEIKH DR KHALID BIN THANI AL THANI Chairman and Managing Director Qatar International Islamic Bank

ON A STRONG WICKET

AIDED BY EXPANSION IN LENDING TO THE PRIVATE SECTOR, QATARI BANKS CONTINUED THEIR MARCH ON THE PATH OF PROGRESS FOR YET ANOTHER YEAR, BOOSTING THE COUNTRY’S ECONOMY AND ALSO POSTING IMPRESSIVE GROWTH DURING 2014.

he growth in credit to the private sector is aimed at supplementing the government’s efforts to encourage the nonhydrocarbon sector. With the construction of infrastructure projects gaining momentum, the appetite for project financing became strong, and as a result, the Qatari banks benefited the most. These developments helped the Qatari banks’ assets become the third largest in US dollar terms in the GCC, which have risen by more than 700% in the last eight years, a feat unmatched by any country in the entire Middle East. According to Qatar Central Bank’s data up to May this year, the local banks have increased lending to the private sector by 16.2% as against the overall loan growth of 11.7%. Loans to the private sector rose by QR16.5 billion between December

2013 and May 2014 compared to QR8.2 billion in the same period in 2012-2013, the data shows. Even the Saudi-based SAMBA Financial Group, has pointed out in its report that the Qatari banks’ non-performing loans (NPL) remained below 2% and liquid assets represented 50% of total assets, providing backstop reassurance on asset quality. In its report entitled “Qatar Economic Insight 2014,” Qatar National Bank said: “NPLs are forecast to remain low between 2014 and 2016 as asset quality is supported by the strong economic environment and the sizable proportion of low-risk loans to the government. Going forward, low provisioning requirements and efficient cost bases will also support Qatari banks’ profitability.” Foreign funding of commercial banks has been reduced

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from 30% of liabilities in 2012 to 23% in mid-2014, and the maturity profile has improved with short-term loans gradually replacing longer–term facilities. FINANCIAL PERFORMANCE Driven by increased public spending, lower impairment charges, stronger asset quality and higher profitability coupled with capital adequacy ratios, which remained above the QCB minimum requirements, the Qatari banks have registered a robust asset growth during the first nine months of the year. In terms of figures, the combined net profitability for all banks increased by 12.2% during this period predominantly driven by higher net interest income. Strong economic growth and increased market activity have been the main drivers behind these positive results (See graph). The collective asset base of all banks has increased by 9% (up by QR78.1 billion) from December 31, 2013, which is primarily due to the increase in lending portfolios by QR59.1 billion (10.5%). This is a result of increased public spending on the back of a gradual acceleration of infrastructure projects. Further, Islamic banks continue to experience higher asset growth rates than their conventional counterparts. Deposits are up, with a healthy growth of 7.7% (up by QR46.4 billion) from December 31, 2013. Qatar National Bank, the leading lender among the local banks, posted a net profit of QR8 billion while total assets grew by QR475 billion. The net profit of Qatar Islamic Bank, the country’s largest Sharia-compliant lender by assets, was QR1.13 billion while the total assets of Doha Bank increased to QR70.3 billion during the first nine months of 2014 as against QR63 billion for the same period in 2013. Qatar International Islamic Bank (QIIB) earned a net profit of QR625 million and increased its assets to QR37.9 billion during the first nine months this year compared with QR33 billion for the same period in 2013. QIIB Chairman and Managing Director (CMD) HE Sheikh Dr Khalid bin Thani bin Abdullah bin Thani Al Thani said that the local market presented promising opportunities as there are many ongoing projects and the general environment had been very favourable. “We are doing what requires to be done to contribute to funding these projects based on our policies and strategies. These help us to participate in the process of adding value to our national economy,” he added. Head of Financial Services and Partner in KPMG Qatar Omar Mahmood said: “For the first time recently, market sentiment appears to be more correlated with entity–specific fundamentals, with bank share prices for all but one bank

Our aim is to become a pan-GCC presence, serving the bank’s growing client base across the wider GCC region and leveraging our reputation in trade finance to expand into those countries with which Qatar (and other GCC countries already has an established presence.” DR RAGHAVAN SEETHARAMAN Group CEO Doha Bank

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For the first time in recent periods, market sentiment appears to be more correlated with entity-specific fundamentals, with bank share prices for all but one bank exhibiting a positive trend from the prior period.” OMAR MAHMOOD Head of Financial Services and Partner KPMG Qatar

exhibiting a positive trend from the prior period.” Islamic banks’ share prices have, on average, increased by 69%, whereas conventional banks’ share prices have on average increased by 12%. According to him, the increase is mainly a result of population growth, spurt inmarketing and attractive pricing to absorb liquidity in the market. “This will certainly be an area of continued focus for local banks given the recently issued Qatar Central Bank regulations on the ‘loan to deposit’ ratio which will force banks to actively look to increase their customer deposit base, and if not, be faced with restricting lending activities,” he said. Despite concerns over recent oil price declines and increasing regulatory–driven capital requirements (mainly for ‘domestic systemically important banks), the overall banking sector outlook remains positive. Bank lending and investment activity, both domestic and international, are expected to rise on the back of further acceleration of infrastructure projects ahead of the 2022 FIFA World Cup and increased public spending underpinned by high fiscal surpluses, Mahmood added. MAIN CHALLENGES While there is adequate liquidity due to high volumes of deposits, raised both locally and overseas and also because of their healthy funding profiles, the presence of risk factors for the Qatari banks cannot be discounted. Besides the US interest rates, a drastic drop in oil prices is likely to impact Qatar’s banking industry, which has been making substantial investments in the oil and gas industries for some time. Banks seem to have few risks to concern themselves with, though last year saw deterioration in credit quality in the wake of a rise in risk-weighted assets, causing the capital adequacy ratio to decline to 16%. While this was higher than the 12.5% as stipulated by the Qatar Central Bank (minimum regulatory requirement of 10% plus a 2.5% conservation buffer) to meet Basel III norms, a rapid rise in lending has meant that some

banks have had to raise additional capital. Doha Bank Group CEO Dr Raghavan Seetharaman said that the major challenges faced by Qatari banks include pressure on Net Interest Margins (NIMs), payment delays from contractors and execution risks in geographical expansion. Accommodative monetary policy in the United States has been mirrored by low policy rates in Qatar and the interest rates are expected to remain low until mid-2015. The publicprivate partnership (PPP) model has worked well after the global financial crisis in Qatar. “The precautionary measures adopted by the Government towards the banking sector have enhanced the ability of banks to cope with any possible repercussions of the global financial crisis and thereby not impacting its credit ratings. Qatari banks will strategise to meet the challenges arising from changing market dynamics,” Dr Seetharaman said. Qatar’s GDP growth is expected to grow by 6.3% in 2014. Brisk, double-digit expansion in the non-oil and gas economy is expected in 2014. Construction activity is projected to expand by 14.1% in 2014. The investment projects contributing to the non-hydrocarbon sector entail the possibility of overheating in the near term, and low return and overcapacity in the medium term. “To address such risks, the authorities are monitoring price developments and attempting to identify and address any supply bottlenecks emerging from increased investment activity,” Dr Seetharaman said. MERGERS AND ACQUISITIONS The banks also continued with their activity of mergers and acquisitions during 2014. Qatar National Bank has purchased 23.5% shares in the pan-African lender Ecobank in September while Masraf Al Rayan has acquired over 98.34% shares of the Islamic Bank of Britain (IBB) in February this year. Qatar Islamic Bank (QIB) has acquired an additional 10% of the voting shares of Asian Finance Bank for QR61 million which raised the total shareholding to 60% in May this year. AFB is registered as an Islamic bank in Malaysia and regulated by Bank Negara Malaysia, according to the bank’s financial statement released in September this year. QIIB also acquired an additional 62.99% of the voting shares of Arab Finance House (AFH) and secured control over the financial and operating activities of AFH with 99.99% of the share capital in December last year. AFH is registered as an Islamic bank in Lebanon and regulated by Banque du Liban. Doha Bank, the Gulf state’s fourth-largest lender by assets, has acquired HSBC Oman’s India operations in October while it has secured a licence to commence operations in India in the last quarter of 2013. “Our aim is to become a pan-GCC presence, serving the bank’s growing client base across the

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QATARI BANKS’ PERFORMANCE IN 2014 BANK

TOTAL ASSETS

NET PROFIT

TOTAL DEPOSITS

EARNINGS FOR SHARE (EPS)

QNB

QR486 billion

QR10.5 billion

----

QR14.9

QIB

QR96 billion

QR1.6 billion

QR67 billion

QR6.78

QIIB

QR38.4 billion

QR826 million

QR26.6 billion

QR5.45

Al Khaliji

QR51.2 billion

QR562.09 million

----

QR1.56

QR80 billion

QR2 billion

QR62.57 billion

QR2.67

Ahlibank

QR31.3 billion

QR601.3 million

-----

Doha Bank

QR75.5 billion

QR1.35 billion

QR45.9 billion

QR5.24

Masraf al Rayan

wider GCC region and leveraging our reputation in trade finance to expand into those countries with which Qatar (and other GCC countries in which the bank already has an established presence,” Dr Seetharaman said. He said that notably Kuwait and the UAE enjoys significant trade ties and other bilateral ties and synergies, including business flows and other ties such as expatriate accounts. He said that Doha Bank will continue to focus on expansion in India as it has a huge bilateral trade and development not only with Qatar or other GCC countries but also with most of the global locations such as Japan, China, South Korea, Singapore and Australia, where the bank is already present. EMBRACING NEW TECHNOLOGIES In tune with changing times, Qatari banks have been transforming themselves by adapting innovative and digital technologies to further improve customer-centric services both within and outside the country. While Internet and mobile banking have changed banking operations across the world in the last few years, the local banks are looking at ways and means to understand the customers’ needs and offer them customised solutions. The interface between the banks and customers is expected to be reduced further with more digital channels being introduced for the benefit of the customers, and new business models tailored to suit customers’ needs are expected to proliferate in the near future. With digitisation entrenching firmly in banking operations, the “brick and mortar” branches will play a supportive role for digital engagement and regulatory requirements but the human interaction will continue in the future. Dr Seetharaman said that the costs of regulation and competitive pressures will lead to industry consolidation. “Technology has transformed the way people bank and it is one of the main drivers behind accelerating the pace of innovation in this sector. Online banking, mobile banking,

chip and pin have now become part of our way of life for everyday banking. New non-competitors such as Walmart, Deutsche Postbank AG, La Banque Postale and Virgin Money have emerged in the financial services industry. Online banking, payments, personal and business financial planning and credit are just a few of the areas targeted by such firms,” he said. Stating that digital banking has revolutionised bankcustomer relationships, Dr Seetharaman said: “It is the new channel to improve revenue growth and cross sell. Local GCC banks appear well positioned to build on a solid online banking trend. The financial institutions will aim at improving customer experiences through better offerings through digital banking. The banks can invite customers through social media and make customers emotionally involved. To be successful, banks must engage every day, and to do this, they must also promote and sell non-financial services. Social networks enable banks to be in close touch with customers.” ISLAMIC BANKING Despite the four Islamic banks in Qatar maintaining growth trajectory consistently, they have their own challenges like complying with Basel III regulatory norms that would come into effect in the coming years. While the Islamic banks are awash with funds and not at all affected in meeting Basel III’s capital requirements, it is the deposit base that may pose problems as no interest would be paid as per Sharia principles. Hence, these banks have to negate the volatility to abide by Basel III regulations by increasing their high-quality liquid assets (HQLAs). But the problem is that these HQLAs are in short supply and it would be interesting to see how the Islamic banks would come out of the rigmarole and they are looking at the Malaysia-based Islamic Financial Services Board, a global standard-setting body, which is likely to release a guidance note on the subject

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MARKET BULLISH, IPOS BEARISH

THE HUGE RESPONSE TO THE INITIAL PUBLIC OFFERING (IPO) BY MESAIEED PETROCHEMICALS HOLDING COMPANY (MPHC) EARLY IN 2014, THE FIRST ONE AFTER A GAP OF FOUR YEARS, RAISED THE HOPES OF THE BUSINESS COMMUNITY IN QATAR BUT THE ENTHUSIASM, ALBEIT TEMPORARILY, FIZZLED OUT WHEN THERE WERE NO MORE IPO OFFERINGS ANNOUNCED TO FOLLOW MPHC’S SUCCESS.

he MPHC shares were offered only to Qatari nationals and the company raised QR3.2 billion ($876.5 million), showing the tremendous faith the issuers as well as the investors had on the market. The MPHC shares attracted more attention to the market from local and foreign investors as the issue was oversubscribed five times. However, only about 25.725% of MPHC shares were floated and nearly all of them were taken up by private investors. The IPO was the largest deal and accounted for about 40% of the total capital raised by companies in the Middle East and North Africa (MENA) region this year. Aamal Company Chief Financial Officer Mohamed Ramahi said that the success of the MPHC IPO and the scale of public participation has certainly boosted local market sentiment, together with the strong performance of companies listed on Qatar Stock Exchange (QSE) and, of course, Qatar’s upgrade to MSCI emerging market status. “Much of the optimism that surrounds the future of QSE stems from the favourable macro-economic outlook for the country. Positive market sentiment is also being driven by the

resurgence of the IPO market across MENA and particularly across the GCC countries which continue to attract the large IPOs that should enhance overall market performance in the future,” he said. Even the upgrade of QSE to emerging market status will go a long way in changing investor perceptions and will help to boost the long-term prospects of the market. “There are currently several IPO listings in the pipeline, and with the improved market regulations for listed companies, we expect to see more companies consider a listing over the next few years,” Ramahi said. There are 43 companies listed on the Qatari bourse at present and the combined net profit of 42 firms for the first nine months of 2014 was QR32.7 billion as against QR30.1 billion for the corresponding period in 2013 (an increase of 8.8%). Their total value has crossed QR675 billion as of January 4, 2015. Favourable market conditions such as the Emiri Decree allowing listed companies to raise their foreign ownership limits to 49% of the total capital; the QSE’s upgrade as emerging market on the trading volumes, treating the GCC nationals on a par with Qatari nationals with respect to the ownership of shares listed on the QSE and robust financial

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results posted by the listed companies along with healthy dividends were expected to attract institutional investments outside Qatar but it did not happen. The two main reasons why the bourse has been struggling to attract more listings are that family-owned businesses, which dominate the country’s economy, fear losing control of companies if they are listed and are also wary of the greater scrutiny they will come under. The other reason is that many Qatari businesses are highly profitable and feel that they do not have the need to raise capital from the market. Even successful organisations such as Barwa Bank and Qatar First Bank, which were keen to get listed on the QSE this year, reportedly pushed their plans under the carpet. While Qatar First Bank is registered with the Qatar Financial Centre Authority and has to comply with certain procedures before getting the nod from Qatar Financial Markets Authority (QFMA) for listing, the reason for Barwa Bank not going public was not known. QSE Chief Executive Officer Rashid bin Ali Al Mansoori said: “We have been explaining to the companies, particularly family-owned businesses, about the benefits of getting listed. Initially the companies showed interest but lost interest later.” Another factor that can allay any apprehensions of the companies is that the standards of QSE are on a par with international standards, and the investment environment in Qatar is healthy. In 2009, QSE established a strategic partnership with NYSE (New York Stock Exchange) Euronext, which supported QSE in its implementation of a development strategy focused on technological and procedural advancement to bring the exchange into line with international best practice. “The upgrade of the Qatar and UAE markets to Emerging Market status also indicates that the GCC bourses’ disclosure mechanisms are in line with best practice,” Ramahi pointed out. BACK IN ACTION However, things have started moving as many firms are planning to tap the market in the next few months and QSE is contemplating to launching an awareness campaign on the issue. “We are working with the companies to complete the compliance procedures, with both state entities and private businesses expressing interest in listing,” Al Mansoori told a local daily. On the other hand, the QSE has decided to open a separate stock market for small and medium-sized enterprises (SMEs) early next year. Of the ten SMEs which have applied, five will be listed on the Qatar Stock Exchange (QSE) Venture Market, while others are in the process of completing the formalities. Besides, there are several other companies that are preparing

There are currently several IPO listings in the pipeline, and with the improved market regulations for listed companies, we expect to see more companies consider a listing over the next few years.” MOHAMED RAMAHI Chief Financial Officer Aamal Company

themselves to get consultative support and they too are likely to be listed by end of 2015. According to a PricewaterhouseCoopers report, as many as nine IPOs were issued raising QR6.5 billion ($1.8 billion) in the first six months of 2014, compared with five IPOs raising QR1.4 billion ($385 million) for the corresponding period in H1 2013, an 80% increase in volume and 381% increase in value. “The outlook for IPOs in the GCC appears to be strong particularly looking towards the latter part of 2014 and into 2015,” the report added. EXCHANGE TRADED FUNDS As part of its development strategy to improve liquidity in the market, the Qatar Financial Market Authority (QFMA) is planning to allow more Liquidity Providers (LPs) in the market. The LP scheme was approved in 2013 and is said to be a precursor to the launch of Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) on QSE. The LPs will assist in reducing prices, volatility, promoting confidence among investors, fostering the listing of new companies and helping to ensure a fair and orderly market. Reports say that foreign debt-based and general indexbased ETFs would be launched initially and they would be followed by Islamic-index based ETFs, which are mostly index-based open-ended funds that can be bought and sold as ordinary shares on the bourse

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“FAMILY-OWNED BUSINESSES SHOULD LIST ON THE QSE” THE SIX-YEAR WAIT OF QATAR STOCK EXCHANGE (QSE) HAS FINALLY ENDED WITH MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) UPGRADING ITS STATUS FROM FRONTIER TO EMERGING MARKET IN JUNE 2014.

n an exclusive interview with Progress Qatar, QSE Chief Executive Officer Rashid bin Ali Al Mansoori tells about the market response to the MSCI reclassification, how they are working to evince interest among companies to get listed and go for IPOs, the impact of Saudi Arabia’s bourse on GCC economies after it will be upgraded to emerging market in the coming months, among others. HOW IS THE MARKET’S RESPONSE AFTER QATAR STOCK EXCHANGE’S RECLASSIFICATION AS EMERGING MARKET? The stock market in Qatar outperformed the region in the past year following the MSCI and S&P Dow Jones upgrades of the Qatari market to emerging market status in 2014. Several months later, MSCI raised Qatar’s weights in its emerging markets index in a move promising fresh foreign fund inflows.

I would like to point out that Qatar Petroleum (QP) unveiled a new strategy contemplating a series of initial public offerings (IPOs) for its subsidiaries over the next 10 years and the Mesaieed Petrochemical Holding IPO is not an isolated event but is part of a series of IPOs that the company intends to undertake during the next 10 years.” RASHID BIN ALI AL MANSOORI Chief Executive Qatar Stock Exchange

Analysts estimate Qatar could attract around QR364 billion ($1 billion) in total of additional foreign funds because of the latest MSCI decision. QE Index advanced to the highest level in almost five years. It has been a long journey, but we have finally arrived. The reclassification decision firmly establishes the region on the emerging-markets growth map in the minds of global institutional investors. Qatar’s national economy is growing much faster than developed markets as government funnels wealth into infrastructure projects. We have already seen an increase in accounts opening with the exchange by foreign institutions and gradually these will increase their investments in the market, especially the stocks that had been included in the MSCI EM index. WHAT ARE THE LATEST DEVELOPMENTS PERTAINING TO QSE AND WHEN ARE YOU LAUNCHING VENTURE SHARE MARKET FOR SMES? We already have launched an SME-dedicated market in 2011 under the name Qatar Exchange Venture market. As you know, Qatari SMEs contribute massively to the national economy. We want to give them a hand and help them grow by giving them a strong motivation to look for a new source of funding by raising their capital without having to face debt risks. It is within this context that we want to focus on the importance of transforming family-owned businesses into joint- stock companies as a first step towards incorporating

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them in the financial market. It would reflect the commitment of those companies to transparency standards and corporate governance requirements to comply with best practices. In general, the transformation of SMEs into public listed companies has a significant positive impact on the economy as a whole. Joint-stock companies are often created by a large group of founders willing to invest in large capital projects, such as energy, telecommunications and infrastructure projects, where it is difficult for SMEs to do heavy lifting on their own. THE WAIT FOR EXCHANGE-TRADED FUNDS (ETFS) ON QATAR STOCK EXCHANGE HAS BEEN TOO LONG. WHEN WILL IT BE LISTED AND WHAT ARE ITS SPECIAL FEATURES? We have plans to list various ETFs in Qatar Stock Exchange in the near future. As you may already know, the listing of these relatively sophisticated products requires regulatory approvals and operational readiness. We are ready operationally, we carried out the required testing, but still the regulatory approval is needed for the listing. WHAT IMPACT DO YOU FORESEE FOR QSE AFTER THE SAUDI BOURSE IS RECLASSIFIED AS EMERGING MARKET IN 2015? The anticipated upgrade of Tadawul will make the GCC earn a place on the global investment radar with a huge funds inflow as the result of joining the higher tier. Because much of the funds tracking the index are passive investors, inclusion in the MSCI index is expected to compel additional capital to be funnelled to the GCC region. An upgrade would ensure increased visibility of GCC companies before foreign financial powerhouses. The upgrade will attract additional international investors to the GCC market and will support the liquidity of the GCC market and thus benefit listed companies and the other investors in the region. I believe that the reclassification of the Saudi bourse is likely to encourage governments throughout the GCC to further liberalize access to their markets by raising foreign ownership limits for investors and adopting flexible legislative and regulatory frameworks. The anticipated upgrade of the Saudi market would be a milestone for the GCC financial market, in our view, as it holds out the prospect of greater foreign institutional involvement in the capital markets. In the medium term, we believe increased exposure to international investment might be expected to lead to an increase in initial public offerings (IPOs) not only in Saudi Arabia but also across the GCC region, thus potentially leading to a much-needed deepening of the equity market.

WHY HAS NO COMPANY ANNOUNCED TO GO PUBLIC EVEN AFTER THE TREMENDOUS RESPONSE TO MESAIEED’S IPO EARLY THIS YEAR? We encourage government entities to do IPOs and get listed on Qatar Stock Exchange. However, we are not the only party responsible for this decision. Qatar Stock Exchange provides any company wishing to list with enormous support on the technical and operational sides. In this regard, I would like to point out that Qatar Petroleum (QP) unveiled a new strategy contemplating a series of initial public offerings (IPOs) for its subsidiaries over the next 10 years and the Mesaieed Petrochemical Holding IPO is not an isolated event but is part of a series of IPOs that the company intends to undertake during the next 10 years. This plan is within the context of the investment and savings programme that seeks to offer Qatari citizens the opportunity to share in the country’s current and future wealth. WHAT ARE YOUR PLANS FOR QSE IN 2015? We are studying and implementing a number of initiatives to boost and maintain liquidity in the market. Of particular note is the recently implemented liquidity provision scheme which allows for both exchange and issuer sponsored programmes. We are also working hard to encourage further IPOs, advising both government and corporate entities on the benefits of listing. Clearly, the MSCI upgrade to emerging market status has had a positive impact on our liquidity and we believe our other initiatives will further boost our performance in months to come. Our average trading turnover has increased by over 180% year-on-year and we continue to see burgeoning interest in index constituents. As for the proposed stock split, we believe that this will go through as it is supported by senior decision makers, the regulator and ourselves. However, I cannot give you a specific date for its implementation because it is subject to regulatory approvals. Based on growth outlook, the primary aim of Qatar Stock Exchange is to support Qatar’s economy by giving investors a platform through which they can trade fairly and efficiently. The Exchange is part of a comprehensive national strategy that aims at establishing Qatar as a world-class international market and reinforcing the country’s position as a regional financial centre. In the immediate future, the strategy will centre on continuing the groundwork laid in the cash market, specifically (i) improving liquidity further (ii) facilitating listing procedures and developing investment products and (iii) improving disclosure and transparency applications

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AN EBULLIENT GROWTH

QATAR’S INSURANCE SECTOR HAS BEEN BUOYANT IF THE GROWTH IN THE GROSS WRITTEN PREMIUM (GWP) OF THE COUNTRY’S FIVE LISTED INSURANCE FIRMS IS ANY INDICATION.

n its Financial Stability Review report for 2013, Qatar Central Bank (QCB) has said that the GWP of these firms stood at around QR5.1 billion ($1.4 billion), accounting for 0.7% of the GDP during the year. Qatar has become the third largest in the GCC’s insurance market in 2013 and is expected to grow further in the next eight years as the government has taken up construction projects on a massive scale besides investments in the non-oil sector. The insurance sector’s density also increased from QR2180 ($599) in 2012 to QR2497 ($686) in 2013. “The sector

is developing in pace with the country’s economic growth,” the report said, adding that the combined assets of these five companies increased from QR16 billion in2012 to QR21.9 billion in 2013. What has helped the sector grow is the global recovery which, in turn, helped an increase in the investment portfolio of the sector. The investments in securities increased by QR1.8 billion in 2013 compared with QR193 million registered the previous year. The combined GWP in life and non-life segments in the GCC amounted to QR59.33 billion ($16.3 billion) in 2012, having

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grown at a Compound Annual Growth Rate (CAGR) of 11.8%, though this amount accounted for only 0.4% of the world GWP. UAE and Saudi Arabia dominated the regional market, representing 80 percent of the total GWP of the GCC. The insurance regulatory development received a boost with the launch of the Strategic Plan for Financial Sector Regulation by the QCB, the QFC Regulatory Authority and the Qatar Financial Markets Authority (QFMA) in December 2013. At present, there are 27 companies - 26 insurers and one reinsurer - which are permitted by the authorities to operate in Qatar. Of them, six companies – Qatar Insurance, Qatar General Insurance and Reinsurance, Al Koot, Doha Insurance, Al Khaleej Takaful Group and Qatar Islamic Insurance – have a market share of about 80% and the rest is divided among others. KEY LINES OF GROWTH The business for personal lines such as motor and health insurance are yet to gain momentum in Qatar compared with other countries in the region. These lines of business have proven to be the powerful growth engines in Saudi Arabia and the UAE. Due to this, there is a huge catch-up potential for Qatar’s insurance market. KPMG’s Director for Assurance and Advisory, Adeel Mushtaq, said that Qatar’s commercial insurance sector has been the primary source of growth in 2013-14 and is likely to continue to benefit from a strong pipeline of infrastructure projects leading up to the 2022 FIFA World Cup. “Within the commercial insurance sector, property and construction insurance accounts for about 70% of Qatar’s non-life premiums. And with the Qatar insurance market experiencing compound annual growth of 18% over the last five years, this is expected to grow further,” Mushtaq said. Third party motor insurance is also an important line in the personal insurance sector and a large portion of the personal non-life insurance. Motor insurance is the most competitive line generating the lowest margins in Qatar, Mushtaq said. Though Qatar’s share of the global insurance sector is not very significant, it is considered as an important market and is watched with interest by international and regional players. This is evident through ever-increasing participation from global players in Multaqa, a mega event where top insurers from around the world gather every year to discuss the latest developments pertaining to the industry. “I am particularly optimistic that there are opportunities for global and regional players to set up Qatar as their base because of its fastest-growing economy with infrastructure and policies with keen interest from policy makers to support a vibrant and sustainable insurance sector, international level of regulatory environment and tax benefits,” Mushtaq said.

At QR2,573 ($707) per head in 2012, Qatar had the second highest spend per head on insurance in the GCC. As awareness of the benefits of insurance and insurance products grows, and as the insurance regulatory framework develops further, penetration levels should also rise.” RAYMOND HURLEY Deals Partner Middle East PricewaterhouseCoopers

PricewaterhouseCoopers Deals Partner for Middle East, Raymond Hurley, said that insurance penetration, which measures insurance premiums as a proportion of GDP, is low in Qatar compared with other economies. “This is partly due to the disproportionate representation of infrastructure and engineering spend in Qatar’s GDP. A more telling statistic is insurance density, which measures dollarspend on insurance per head of population. “At QR2,573 ($707) per head in 2012, Qatar had the second highest spend per head on insurance in the GCC. As awareness of the benefits of insurance and insurance products grows, and as the insurance regulatory framework develops further, penetration levels should also rise. Given the establishment of the National Health Insurance Company (NHIC), continued population growth and the significant ongoing spend on infrastructure, the growth prospects for the Qatari insurance and reinsurance industry are very strong,” Hurley said. GLOBAL REFORMS According to him, global regulatory reforms across the financial services sector have been continuing and several important insurance initiatives are in progress. They include the International Association of Insurance Supervisors (IAIS) Insurance Core Principles (ICPs), insurance contract project of the International Accounting Standards Board (IASB), and review of takaful (insurance compliance with

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QATAR - KEY FACTS Real GDP growth Real GDP per capita (2013 est.) Population (2013 est.)

5.3% US$78,949 2 million

Premiums (2012): Non - life Life Total

$1,242 Million $58 million $1,300 million

source: Ministry of Developmenrt Planning and Statistics

Islamic principles) accounting standards of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). “As insurance supervisors in GCC countries begin to examine how best they introduce the new IAIS/ ICPs requirements, a growing strategic challenge for insurers is how best to accommodate compliance and reporting requirements and extract value. It is difficult to remember a time when the region’s insurance firms were facing so many regulatory pressures from so many sources,” he pointed out. CEOs in the GCC insurance sector recognise that the changes over the next few years are not only complex but also come with broad for implications underlying system changes. The changes will involve processes which GCC insurers may not be prepared for and raises questions for CEOs about

Within the commercial insurance sector, property and construction insurance accounts for about 70% of Qatar’s non-life premiums. And with the Qatar insurance market experiencing compound annual growth of 18% over the last five years, this is expected to grow further.” ADEEL MUSHTAQ Director for Assurance and Advisory KPMG

how to prepare and transform their business to embrace the change and, at the same time, extract value. TAKAFUL SECTOR Another sector that has been driving the growth of Qatar’s financial markets is the takaful (Islamic insurance) sector but it has its own concerns such as talent shortage and limited population to sustain the momentum. Takaful is an important part of Qatar’s insurance sector, however, as an Islamic finance concept it is still less understood by customers compared to other elements such as Islamic banking. Often customers are unable to distinguish takaful contracts from conventional insurance policies, making competition price sensitive. “In my view, as takaful companies grow, they should invest in much needed research and talent development for the sector and similarly, newcomers to the sector should focus on enhancing their knowledge and building skills,” Mushtaq said. Citing recent developments and the latest data, Mushtaq says they serve to confirm the view that the Islamic insurance sector is the largest and most dynamic in the MENA region. Despite the fact that the sector is still immature and moving towards becoming a credible model of its own, premiums have grown at a CAGR of 20% in the last five years and estimated to grow at a CAGR of 19% from 2012-2015. OUTLOOK FOR 2015 The Qatar Central Bank’s (QCB) new insurance law is considered an important step in advancing and strengthening the regulatory and supervisory framework in Qatar as the legislation will not only enhance the scope of regulations and financial stability but also increase coordination and knowledge sharing between regulatory and supervisory bodies in Qatar. The new law is particularly important as the new global regulatory and accounting reforms for insurers continue at an unrelenting pace. QCB is currently developing regulations and has required all entities conducting insurance business in Qatar to register their intent to seek a licence to operate. “I expect the new set of regulations will be based on the revised ICPs and it is likely that the new QCB rules will be very similar to the revised Qatar Financial Centre Regulatory Authority Rulebook, which is likely to come into effect in 2015,” Mushtaq said. “As the GCC insurance sector establishes itself, the greatest challenge is to meet the shift in focus: changing demographics and environments are likely to have a positive impact on demand for insurance and takaful products in the region. Ambitious infrastructure projects are going to be the major growth driver for the region and there will be a large role for insurers to support this growth,” Mushtaq added

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We expect momentum to continue to gather steam, as infrastructure development picks up further which also pushes up population growth. Such high levels of job growth should boost domestic consumption, supporting the services sector and providing further impetus to non-hydrocarbon GDP growth.” YOUSUF MOHAMMED AL JAIDA Deputy Chief Executive officer Qatar Financial Centre Authority

GOING STRONG QATAR FINANCIAL CENTRE AUTHORITY (QFCA) HAS BEEN SUCCESSFUL IN OFFERING WORLD-CLASS FINANCIAL SERVICES TO THE COMPANIES INTENDING TO START THEIR OPERATIONS IN THE COUNTRY EVER SINCE IT STARTED ITS OPERATIONS NINE YEARS AGO.

n an interview with Progress Qatar, QFCA Deputy Chief Executive Officer Yousuf Mohammed Al Jaida disclosed about the latest developments pertaining to the financial sector and also the Authority’s achievements during 2014 and its future plans. “The strategic plan for the future of financial sector regulation in Qatar, which was jointly launched by the Qatar Central Bank, the Qatar Financial Markets Authority, and the Qatar Financial Centre Regulatory Authority in December 2013, has been a landmark document, setting out a roadmap of strategic priorities for the next three years (2014-2016) for regulating the financial services sector,” Al Jaida said. He said that the aim of QFCA was to facilitate an “exceptional and thriving business environment” across the country. By providing an ideal and highly attractive platform for local, regional and international business growth, QFCA has successfully welcomed and catered to an increasing number of companies and business-related services. “We are pleased with the progress that we have achieved over the course of the year,” he said.

He said that the law and tax environment was continuously being assessed and improved upon to ensure compliance with international best practice, while advancing the goals of Qatar National Vision 2030. “We are especially proud that 30% of companies licensed by the QFC are home-grown Qatari businesses, which are benefitting from a host of first-class services. This year, we have made a number of legal and structural enhancements which have enabled us to better service the needs of corporations. We have bolstered the development of local businesses and encouraged the formation of structures such as special purpose companies, holding companies, and company headquarters,” Al Jaida said. Moreover, QFCA is committed to helping newly-licensed firms set up with ease and has recently implemented measures to refine licensing and registration processes. These changes were brought about to reduce the turnaround time on registration processes, which can now be completed in one month or less, according to Al Jaida. The QFCA has also expanded its suite of online services

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in order to drive efficiency across its front and back office functions. “For example, we introduced ‘e-immigration’ which facilitates private access for immigration-related medical checks for QFC-licenced firms’ employees and their families, as well as online tax submission. We will continue to pursue our mandate of building a positive business environment in Qatar, and we are confident that these measures will contribute towards creating a more prosperous future for our nation,” he said. TAX REGULATIONS REVISED The QFC Tax Regulations and Rules were updated for three main reasons: firstly, technical amendments were carried out to clarify areas of uncertainty and prevent perceived abuse of the QFC Tax Law. Secondly, revisions were made to support legislative changes elsewhere in the QFC Laws to position the QFC as a favourable jurisdiction for financing, investment and business activities; for example, explicit new tax legislation has been introduced to make it clear that the majority of the activities of Holding Companies and Special Purpose Companies is tax exempt. And lastly, the regulations and rules provide new and extended relief to encourage new business. In order to encourage more Qatari companies to capitalise on the opportunities offered by the QFC Platform, a zero percent concessionary tax rate has been introduced for wholly owned Qatari companies i.e. LLCs with Qatari nationals who together have 90% beneficial entitlement to, for example, profits available to be distributed as dividends. Beyond this new relief, Qatari QFC companies can access the same benefits as foreign QFC entities. “However, it is important to add that the updated QFC Tax Regulations and Rules were only enacted on June 18, 2014 and so we haven’t had the next wave of tax returns which would apply the benefits now available as a result of the amendments. Finally, in addition to the changes in regulations, the QFC Tax Manual has now been made available online along with the guidance material - a first in the region,” Al Jaida pointed out. INSURANCE AND REINSURANCE SECTORS Expressing confidence that Qatar will be a promising and high-growth market with substantial potential for extensive portfolio diversification, Al Jaida said that the MENA Reinsurance barometer, which was launched by the QFCA, highlighted the region’s robust GDP and insurance market growth as two of its most pertinent features. “It is also crucial to note that since 2008, the region has grown at an inflationadjusted rate of 4% per annum, well above the global average

of 2.9%,” he said. While sharing the views of senior executives from regional and international reinsurance firms, who have said that a strong pipeline of infrastructure and construction projects, coupled with relatively low exposure to natural perils, continued to contribute to the region’s attractiveness, Al Jaida said that in addition to this, the region’s low insurance penetration with total premiums accounting for just 1.4% of GDP, a fifth of the global average, is seen as a fundamental long-term driver of insurance and reinsurance market growth. “I am optimistic and pleased with the performance of Qatar’s insurance and reinsurance sectors this year. The market has shown immense growth potential, especially with a young and rapidly growing population fuelling demand for medical, motor and life insurance, as well as the development of new insurance products,” he said. He further said: “Qatar is in the process of rolling out Seha, a national health insurance scheme, which is a component of the National Health Strategy. As well as the obvious opportunities for the industry that Seha offers, there will undoubtedly also be a number of requirements for professional and business services from supporting industries such as analytics and IT, risk management, communications and compliance.” PROMISING SECTORS According to him, the Qatari economy was currently developing and since the completion of most of the country’s large energy projects and the stabilisation of hydrocarbon production, the contribution of the hydrocarbon sector is flat to contracting in real terms. On the other hand, the non-hydrocarbon sector was expanding quickly with the implementation of major projects thus contributing to almost all the GDP growth. “We expect momentum to continue to gather steam, as infrastructure development picks up further which also pushes up population growth. Such high levels of job growth should boost domestic consumption, supporting the services sector and providing further impetus to non-hydrocarbon GDP growth,” he said. The QFCA’s mission was to push for the diversification of the economy, in line with Qatar National Vision 2030. “We are therefore seeing a strong interest and a deepening pipeline of clients who would like to participate in this growth story. There is widespread interest from all professional and business services firms and we are also seeing a lot of demand from local corporates which see QFCA as the ideal platform to support their international expansion strategy via structures like holding companies, single family offices, special purpose companies etc,” he added

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“QATAR’S EXTENSIVE INFRASTRUCTURE DEVELOPMENTS HAVE A KEY ROLE TO PLAY IN ATTRACTING INVESTORS TO THE COUNTRY.”

HE SHEIKH AHMED BIN JASSIM AL THANI MINISTER OF ECONOMY AND TRADE

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THE BIG LEAP FORWARD

The Emir, HH Sheikh Tamim bin Hamad Al Thani, laying the foundation for the second phase of the Ras Laffan 2 refinery project in May 2014.

ome-grown companies are taking the next big leap forward by going international. Whether it is oil and gas, petrochemicals or power - the key to sustained growth is to explore opportunities in other countries. Having invested a decade to develop capacities within Qatar, it is time now to diversify beyond the country’s borders now. QATAR PETROLEUM Qatar Petroleum (QP) is the heart and soul of Qatar’s energy business. Its net income of QR115 billion accounted for more than 15% of Qatar’s gross domestic product (GDP) in 2013. The oil and gas business is vertically integrated from upstream to downstream covering exploration, production, marketing and petrochemicals. Through stakes, QP also has

a presence in Qatar’s key industrial sectors such as steel and aluminium. The juggernaut has been at the forefront of the country’s development plan spearheading Qatar’s energy investments within and outside the country. Over the last decade QP set out to invest in infrastructure needed to monetize its gas reserves. It has successfully leveraged international partnerships in exploration and production to extract its energy reserves. Captains of the world’s energy business - Total, Shell and Exxonmobil - all have a deep-rooted presence in Qatar. With 77 million tons per annum of liquefied natural gas production capacity, Qatar is the largest producer and exporter of LNG in the world. QP has initiated projects for redevelopment of its offshore fields at Maydan Mazhama and Bul Hanine to increase production capacity at its maturing oil fields.

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Another major project- the Barzan gas project expected to come on stream in 2015 - will supply gas to the developing industrial base as well as domestic users in the country. The Ras Laffan 2 refinery under construction will add 146,000 barrels per stream day of refining capacity, almost doubling the existing capacity. Expected to be fully operational in 2016, the facility will use feedstock from Qatar Gas and RasGas will be one of the largest condensate refineries in the world producing naphtha, kerojet, gasoil and liquefied petroleum gas (LPG). Minister of Energy and Industry HE Dr Mohammed bin Saleh Al Sada said that the new refinery represented another step on the path to achieving the Qatar National Vision conceived by the Emir. “The Ras Laffan 2 refinery is part of an integrated development programme being implemented by all active parties in the energy and industry sector in Qatar to enhance our capability to fulfill diverse energy needs.” Al Sada said that the new refinery will create added value and new economic opportunities by enhancing our export capacity and fulfilling the long-term needs of international markets. Among other mega projects pursued by QP is the construction of strategic storage tanks for petroleum products. To be executed in two phases between 2015 and 2030, the objective is to create a buffer for petroleum products in order to meet demand during normal supply disruptions. Having successfully created production capacities and infrastructure over the last decade, QP’s focus is now shifting towards creating a petrochemical empire, developing a strong worldwide marketing network and diversifing the energy asset base across the world. Through its subsidiaries, Qatar is already emerging as a leading world producer of many upstream and downstream products such as helium, urea and ammonia. Aiming at more than doubling petrochemical production capacity, QP has announced projects worth QR91 billion ($25 billion). The Al Sejeel petrochemical plant - one of the two large projects initiated by QP - has been put on hold. In a communiqué, Industries Qatar - a QP group company indicated it was evaluating options for a better project. In 2013, QP consolidated its marketing and distribution operations under one umbrella to achieve efficiency and to create a global footprint. Muntajat, whose headquarters is located in The Hague, Netherlands, is the gateway to Qatar’s chemical, polymer and fertilizer exports. Since its inception, Muntajat has shipped 14 million tons of chemcials, polymers and fertilisers to more than 120 countries. Muntajat has offices in Jordan, Australia, South Africa, Turkey, Malaysia and China and plans to open 11 more offices soon. Through its international investment arm Qatar Petroleum

The Ras Laffan 2 refinery is part of an integrated development programme being implemented by all active parties in the energy and industry sector in Qatar to enhance our capability to fulfill diverse energy needs.” HE DR MOHAMMED BIN SALEH AL SADA Minister of Energy and Industry

International (QPI), QP has begun acquiring energy assets across the globe. By having a stake in upcoming energy assets, QP hopes to maintain its global position in energy and thwart challenges from new technologies and developments. It has acquired stakes in upstream energy assets in Canada, Congo, Mauritania and downstream refining capacities in Africa, Singapore, Egypt and China. NAKILAT As the owner of the world’s largest gas transportation fleet, Nakilat plays a strategic role by connecting Qatar’s LNG supply chain from upstream to downstream. In the six years since it took delivery of the first vessel in 2008, Nakilat has built a 65–strong fleet of LNG and LPG vessels, some of them quite advanced and the latest in the world. Last year three new LNG vessels were added through its Greek joint venture Maran Nakilat, taking the total LNG fleet to 61 vessels - approximately 15% of the world’s marine LNGcarrying capacity. A strong transportation capacity makes Nakilat globally competitive and provides a lead in gas transportation worldwide. Nakilat will mark its international foray into the gas transportation business by using the newly acquired vessels to transport gas produced by global energy projects outside Qatar. From a gas carrier the company has diversified into shipbuilding, ship repair and marine services through its joint ventures Nakilat Damen Shipyards Qatar (NDSQ), NakilatKeppel Offshore & Marine (N-KOM), Nakilat SvitzerWijsmuller (NSW) and Nakilat Agency Company (NAC). NDSQ has developed a shipbuilding industry in Qatar from scratch. “Since NDSQ began operations in 2010, we have delivered more than 22 new vessels to the local market and have completed refits and repairs on 14 yachts of up to 80m in length. We are well positioned to meet the growing

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Nakilat has plans to increase its fleet of LNG carriers and is holding talks with a number of European and Asian countries in the field. Nakilat also has plans to increase the company’s stake in Greece’s Maran Gas and expand its LNG delivery operations.” ABDULLAH FADHALAH AL SULAITI Managing Director, Nakilat

needs of the maritime industry in Qatar and are now keen to market our facilities and services to a wider audience. We are talking with a number of potential clients about super yacht projects”, says NDSQ’s Managing Director, Rino Brugge, taking journalists on a tour of the shipbuilding facility. Its current order book includes two 71m fast diving luxury superyacht support vessels due for delivery in 2017, seven highly sophisticated naval ships – six 50m-long axe-bow highspeed patrol vessels and one 52m-long diving support vessel for the Qatar Armed Forces at a cost of QR3.1 billion – and seven vessels for towing operator Nakilat SvitzerWijsmuller, a group company. Nakilat SvitzerWijsmuller provides port and marine services and operates a fleet of 25 vessels at Ras Laffan and five vessels at Halul Island, performing 12,500 tug jobs per year in the Port Ras Laffan. The company has fared well in the first nine months of 2014 by earning a net profit of QR693 million compared with QR553 million achieved for the same period in 2013, with an increase of 25%. Nakilat is also expected to exploit future opportunities to acquire new vessels, serve the international marine sector, and to increase the utilisation rate for our shipyard facilities at Erhama Bin Jaber Al Jalahma Shipyard. About future plans, Nakilat’s Managing Director Abdullah Fadhalah Al Sulaiti said that the company has been keen to expand its investments, which currently reached QR54.6 billion. “Nakilat has plans to increase its fleet of LNG carriers and is holding talks with a number of European and Asian countries in the field. Nakilat also has plans to increase the company’s stake in Greece’s Maran Gas and expand its LNG delivery operations,” he said. The LNG global market is at a promising phase, something that encourages Nakilat to look for investment opportunities outside Qatar in order to achieve more value addition to the company and its shareholders. “The company welcomes any investment that achieves

profit commensurate with its vision. However, the company’s focus at the moment is mainly on the activity of gas shipping, an area which we are seeking to expand,” he said. QATAR ELECTRICITY AND WATER COMPANY (QEWC) QEWC is Qatar’s first private sector water and electricity generator and the second largest utility in MENA. The company owns 62% of Qatar’s electricity capacity and 79% of its water capacity at 5,432 megawatt (MW) and 258 million imperial gallons per day (MIGD), respectively. With an installed capacity of 8750 MW, Qatar currently has surplus power of 2700 MW. But rising population and industrialisation are increasing demand for both power and water. “The consumption of drinking water has increased to 328 MIGD in 2013 from 138 MIGD in 2007 and the demand for power is up by 57% to 6255 MW in 2012 from 3990 MW in 2007,” said Mubarak Nasser Al Nasr, CEO of Ras Laffan Operating Company (RLOC) while speaking at the 3rd edition of the Power and Desalination Summit. To meet future demands QEWC has embarked on a slew of generation and desalination projects. Construction work on the Umm Al Haul project with a capacity of 2400 MW of electricity and 130 MIGD of desalinated water is expected to begin in the first quarter of 2015 and commencement of operations is scheduled for mid–2017. The Ras Abu Fontas A2 water desalination project, the first to be entirely financed by Qatari banks, is to be completed by June 2015. Another seawater reverse osmosis plant is coming up at Ras Laffan by mid 2017. The bidding for the 114 MGD independent water project is in process. According to QEWC’s latest annual report for 2013, its total investments within and outside Qatar have exceeded QR12 billion. The company’s international investments include two power projects - one in Oman and the other in Jordan. The company is currently trying to buy stakes in Taweelah Station in Abu Dhabi, Carthage Station in Tunisia and a 24% stake in IPP4 project in East Amman, Jordan. Through Nebras Power Company, QEWC is exploring investment opportunities in regional and international water and power projects. QEWC holds a 60% share and Qatar Petroleum International and Qatar Holding Company hold 20% shares each in Nebras. The company will invest globally in new and existing power generation and water desalination projects, water treatment projects, cooling and heating projects, including supplying necessary fuel and construction of stations. Nebras will enhance QEWC’s position in the global market and diversify its sources of income

PROGRESS 2014-2015 CORPORATE BUSINESS, RESEACH & DIVERSIFICATION

WHERE TECHNOLOGY GOES TO WORK ‘TECHNOLOGY GOES TO WORK’ WAS THE THEME FOR THE 2014 INTERNATIONAL ASSOCIATION OF SCIENCE PARKS (IASP) WORLD CONFERENCE HELD IN DOHA. THE TAG LINE APTLY SUMMARISES QATAR’S EXPECTATIONS FROM ITS RESEARCH ACTIVITIES.

he focus was on research that work for the betterment of Qatar’s economy and society. The choice of Doha as a venue - the first time the high-profile conference was held in the region - is a testimony to Qatar’s rising stature in the world of research and recognition of its efforts towards advancing research in the country. What has Qatar done right to earn this recognition? The ecosystem of research is built on three key pillars - human capital, funding and infrastructure. If the three are in place, outcomes follow gradually. FUNDING IDEAS With a generous 2.8% of the country’s earnings allocated for developing education and research, funding is not a problem. The Qatar National Research Fund (QNRF) runs several programmes to support specific research projects and nurture the culture of research in Qatar. Innovation in schools, colleges and post-doctoral research programmes are awarded, inculcating a research orientation in young minds. Specific grant programmes fund projects in each of these segments. Additionally, the grants offered through the National Priorities Research Programme (NPRP) - QNRF’s flagship

programme - aiming funding at research that will raise Qatar’s profile internationally and foster integration with the global research community. The projects funded under this programme align with the country’s core focus areas of energy, environment, information and communication technology, and health. The grants can be more than QR10.92 million ($3 million) annually for up to three years. Exceptional projects of high national importance are granted up to QR18.2 billion ($5 million). Three such exceptional research projects have been chosen during 2014 under NPRP funding. The first will study the relationship between asthma and obesity among children in Qatar by effectively combining genomic and metabolic technologies; the second aiming at developing novel and environmentally-friendly methods to synthesise polymers; and the third will focus on developing new catalysts and technologies that could significantly impact gas processing technology and CO2 conversion globally. Projects that require more funding to further build on the results of completed research will be provided funds under the new “Renewal Grants System.” The consistent rise in the number of applications received for grant programmes indicates an emerging orientation

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HH Sheikha Moza bint Nasser inaugurates Global Science Park and Innovation summit. towards research in the country. In the seventh cycle of the NPRP, QNRF received 798 proposals, an 18% increase compared with the previous cycle, and the number of applications from Qatari lead principal investigators doubled. Some 162 proposals across 22 institutions in Qatar were awarded research grants during this cycle. INFRASTRUCTURE AND SUPPORT Building world-class laboratories is easily done with the cash at disposal. The glamorous glass and steel Qatar Science and Technology Park (QSTP) that houses high-end technology companies is now 95% occupied. Work on the second phase is already underway. Phase 2 will include two buildings -one a technology building similar to those in Phase 1 and the second will be like a workshop to house tenants who require a more heavy operation testing environment. The 100% free zone equipped with high-end infrastructure is a draw for global companies looking to set up research ventures. QSTP also plays a vital role in commercialising homegrown technologies. Ideas originating in labs and funded

by QNRF are provided a launch platform at QSTP. It also showcases research breakthroughs and facilitates knowledge exchange globally. Industry leaders in various fields regularly participate in programs such as the TECHTalk series â&#x20AC;&#x201C; a knowledge exchange programme where problems, ideas and solutions are discussed opening up a dialogue on issues of national importance. CAPACITY BUILDING Getting funding and setting up the infrastructure is the easier part. But Qatar needs to work really hard on the third pillar human capital. Building capacity is a long drawn out process and cannot be achieved in a short time. How is the deficit being bridged? The short-term approach is to hire world-renowned experts to steer forward strategic projects like the Qatar genome project and to enter into tieups with reputed institutes worldwide. Such collaborations tap into readily available expertise and start off on specific research projects. In the long run, a knowledge-based economy is not sustainable without a pool of local talent.

PROGRESS 2014-2015 CORPORATE BUSINESS, RESEACH & DIVERSIFICATION

Foreign educational institutions that have opened in Qatar hope to bridge the deficit in the long term. Corporate partnerships also play a role in knowledge transfer and imparting skills. CORPORATE PARTNERSHIPS Qatar has successfully leveraged industry relationships to build capacity and carry forward its research agenda. Several high-profile foreign companies have invested in research centres in Qatar. ExxonMobil, Shell and Total – Qatar’s long-standing partners in the energy sector – have invested locally to conduct research relevant to the energy industry in Qatar. The research programmes aim at solving pressing issues faced by Qatar - for example, how to reduce the impact of industrial activity on Qatar’s marine life, how to improve safety in Qatar’s energy operations and how to reduce and reuse water from industrial activities etc. Academia-industry partnerships such as the agreement between Texas A&M University at Qatar (TAMUQ) and Qatar Shell Research & Technology (QSRTC) to find solutions for water, brine and salt management at Pearl GTL is one such example. Technologies developed are tested in real-life situations to understand the impact. The research centres in Qatar regularly work with their global counterparts and invite experts to share knowledge and impart training to local engineers. For example, the Qatar Shell Dialogues is one such initiative that brings together industry, government

and academia to discuss challenges within the local energy industry. This kind of interaction promotes knowledge sharing and kindles the thought process among researchers. DEPLOYING INNOVATIONS Patent registrations for Qatar-developed technologies are increasing and commercial deployment is also on the rise. For example, Qatar Rail recently signed up with Qatar Mobility Innovations Centre (QMIC) to deploy the Masarak platform developed by the company to monitor traffic, reduce road congestion, ensure road safety and manage logistics during Metro construction. ExxonMobil Research Qatar (EMRQ) has filed five new patent applications in 2014. One of the technologies - a remote gas detection system - is designed to improve process safety and environmental performance at LNG production and transportation facilities. Researchers from WCMC-Q, Qatar Biomedical Research Institute (QBRI), and Sidra Medical and Research Center have discovered that some cancers recur post-treatment due to the presence of a certain type of protein that can resist the most advanced cancer drug currently available. The significant breakthrough could lead to the development of a new generation of more effective anticancer drugs. In a global breakthrough, scientists at QBRI have devised a type of treatment using stem cells to treat diabetics. We hope to hear more such interesting stories in the years to come

Getting funding and setting up the infrastructure is the easier part. But Qatar needs to work really hard on the third pillar - human capital. Building capacity is a long drawn-out process and cannot be achieved in a short time.”

PROGRESS 2014-2015 CORPORATE BUSINESS, RESEACH & DIVERSIFICATION

MANUFACTURING GETS A BOOST IN THE LATEST QATAR ECONOMIC OUTLOOK 2014-16 UPDATE RELEASED ON DECEMBER 16, 2014, HE DR SALEH AL NABIT, MINISTER OF DEVELOPMENT PLANNING AND STATISTICS (MDP&S) SAID: “IN 2015, THE NON-HYDROCARBON SECTOR’S SHARE OF GROSS DOMESTIC PRODUCT (GDP) WILL OVERTAKE THAT OF OIL AND GAS AND CONTINUE RISING IN 2016 AND BEYOND. HOWEVER, TO SUPPORT LONG-TERM DEEPENING OF THE ECONOMIC BASE, MORE NEEDS TO BE DONE TO BOOST PRIVATE SECTOR PARTICIPATION IN THE ECONOMY AND UPGRADE SKILLS, TECHNOLOGY AND PRODUCTIVITY.”

atar’s diversification efforts have begun to pay off but need a nudge and the government is going all out to do its bit. The strategy is multipronged - increase local manufacturing, encourage the private sector to chip in, make opportunities available for small and medium enterprises and attract foreign investors.

GOVERNMENT SUPPORT Qatar is wooing private investment and enterprise to sustain the economy in the long run. Efforts are being made at multiple levels - from easing regulations, creating infrastructure to encouraging an entrepreneurship culture. The government is working to create a conducive environment for businesses to thrive. Prime Minister and Minister of Interior, HE Sheikh Abdullah bin Nasser bin Khalifa Al Thani, addressing the business community at a meeting organised by Qatar Chamber, said: “The government is keen to implement development projects faster and ensure required legislation is in place to give the private sector more opportunity in economic activities.” The prime minister revealed that the government was framing policies to improve the private sector’s competitiveness and productivity and is also working on

making land easily available for economic activities. Various ministries have been asked to identify sectors where the private sector can chip in and estimate land requirements for various commercial purposes. It recently announced that the ministries, institutions and entities funded by the government would require special approval to launch new companies or expand. The move ensures the government does not compete directly with private businesses. The nationality-wise quota system for work visas that stipulates a country-wide restriction on hiring has been eased to help the private sector tap the best talent in the market. In his opening address at the Euromoney Conference, the prime minister said that Qatar was in the process of updating the legal framework and directives have been issued to review all systems that have an impact on the investment and business sector in the country. In a bid to improve infrastructure for the private sector, special industrial areas, economic zones and storage capacities are being built. The measures currently undertaken by the government are expected to improve the business environment and attract more investments. The World Bank’s Doing Business 2015 ranked Qatar at 50th place out of 189 countries surveyed and the report shed light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when

PROGRESS 2014-2015 CORPORATE BUSINESS, RESEACH & DIVERSIFICATION

complying with relevant regulations. MANUFACTURING HOLDS PROMISE Qatar’s manufacturing industry is dominated by the production of chemicals, petrochemicals and refining products. The chemical industry accounts for a significant 43% of the manufacturing contribution to the country’s GDP, according to the latest data from Gulf Petrochemicals Association. GSDP 2014-15 Economic Outlook report said: “Manufacturing (sector) will grow but not as quickly as services or construction, nor as fast as in the recent past.” In 2014, the sector’s growth is seen moderating with lower contribution from fertiliser and refined products. However, in 2015, feedstock from Barzan will start feeding into the petrochemical and refining sector, contributing to higher manufacturing growth. The report further said that, though buoyant, the second leg of manufacturing expansion will be gradual. “Other segments of manufacturing will grow but more slowly than in recent years as production capacity tightens. Growing demand by the construction sector for cement and metals should encourage some investment in new capacity, prompting manufacturing growth to recover some of its earlier impetus,” it said. Future manufacturing growth will be fuelled by the ongoing expansion in the petrochemicals industry and the spillover effect of the infrastructure and construction boom. A strong manufacturing sector will keep a large part of the infrastructure spending within the country and benefit locals. Qatar has a local manufacturing base for key products such as cement, steel and aluminium. Cables, pipes and plastics are also produced locally to feed the infrastructure boom. Qatar is also exploring the possibility of becoming a regional leader in certain products. For example, Qatar Intermediate Industries Company (Alwaseeta) and Qatar Korea LED Consortium (QKLC) are setting up a manufacturing facility for light-emitting diode (LED) lighting systems in Qatar. The facility will produce explosion-proof LED lighting for the oil and gas industry, special LED street lighting, stadium lighting and traffic signal lights. Through the project, Qatar aims at becoming a leader in the Middle East and North Africa LED industry and tapping regional export opportunities. In another initiative, Qatar Development Bank, through Tasdeer, helped identify export opportunities for nonhydrocarbon goods manufactured in Qatar. Some 13 products were identified specifically for export to Morocco after studies revealed the scope for increasing exports to the rest of the Middle East and North Africa region. After carefully studying Qatar’s advantages, the Ministry of Energy and Industry opened 30 projects in the pharmaceutical,

chemical, mineral, environment and other sectors for local manufacturing. Given the recent developments, Qatari businessmen are quite optimistic about future projects and expansion prospects. According to the latest Business Optimism Index (BOI) released by Dun and Bradstreet and sponsored by Qatar Financial Authority, the composite BOI for Qatar’s nonhydrocarbon sector rose to 49, a 26% quarter-on-quarter increase. Some 38% of firms in the non-hydrocarbon sector, which are planning to invest in business expansion in the last quarter of 2014 as compared to 28% in the hydrocarbon sector and 47% respondents in the non-hydrocarbon sector, said that they do not anticipate hindrances to business operations throughout fourth quarter of 2014. Yousuf Al Jaida, Deputy Chief Executive Officer of the QFC Authority, said: “This quarter’s survey demonstrates Qatar’s positive business environment and optimism among our business community remains high.”

The government is keen to implement development projects faster and ensure required legislation is in place to give the private sector more opportunity in economic activities.” HE SHEIKH ABDULLAH BIN NASSER BIN KHALIFA AL THANI Prime Minister and Minister of Interior

LOCAL CONTENT UP According to the latest Qatar Energy and Industry Sustainability report 2013, 60% of the materials and services in the industry were sourced locally compared with 54% in 2010. Keen to support local manufacturing and increase local content, the government gives preference to companies that source locally in the bidding process. Goods with Qatari content are discounted by 10% and from other GCC countries by 5% while competing for government contracts. As a rule, tenders worth QR1 million or less are open

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only to local contractors, suppliers and merchants. Large infrastructure projects also stipulate international firms should partner with local firms to bid for major tenders. This helps local companies to gain experience and skills from the foreign partner. For example, most consortiums that won Qatar Rail’s Doha Metro projects have a Qatari partner. Large infrastructure projects tendered by Qatar Rail, Ashghal and Lusail Real Estate Development Company (LREDC) have identified opportunities available for the private sector and communicate through industry engagement events. For example, Qatar Rail identified more than 104 opportunities for the private sector. According to Qatar Rail, the investment opportunities could lead to a 0.3% annual increase on the GDP and increase private sector contribution to GDP by 0.7%. Foreign investors in Qatar also do their bit to encourage local manufacturers. Qatar Shell, for instance, has a dedicated localisation programme. In 2014, five new Qatari SMEs became the supplier of choice for Pearl GTL in addition to the three local suppliers added last year. Participation at the annual SME Business Opportunity Workshop conducted by Shell Qatar has been growing year on year. In 2014, 110 local SMEs and entrepreneurs participated and 33 qualified to tender across seven specific business opportunities. In 2013, 10 companies qualified to tender out of which three were awarded contracts. QDB works with its wide network of local partner banks to attract local SMEs and also provides management, advisory and financial support.

According to the report, “The GCC business environment has become more conducive to foreign investments.” Significant strides have been made by the GCC in improving their business environment to facilitate FDI flows into the region the report said. “Apart from possessing favorable tax regimes, individual countries have embarked on substantial reforms over the last decade to make it easier to start a business, obtain credit, enforce contracts and trade across borders,” it added. Qatar remains the easiest country to pay taxes globally, according to the World Bank’s Doing Business 2015 report. The country is ranked 16th in ‘the Global Competitiveness Report 2014-15’ compared with 13th the previous year and is the second most competitive economy in the Middle East after the UAE (ranked 12th in the latest report). Global Competitiveness Index (GCI) is an annual exercise where 144 economies were evaluated for business competitiveness. Pointing toward the shortcomings, the report suggested: “Further opening the country up to foreign trade will be necessary to increase productivity in non-hydrocarbon sectors. At a more fundamental level, Qatari businesses would benefit from reduced administrative barriers to set up businesses and from upgrading the transport infrastructure.” Qatar is optimistic about attracting foreign investments. Al Jaida in the D&B report said: “We expect this (the high business optimism) to translate into increased interest in Qatar from international firms and more Qatari companies establishing in the QFC.”

FDI TRICKLING IN Qatar has set an example by successfully attracting foreign investment in the energy sector. Shell alone has invested QR76.44 billion ($21 billion) over the last six years in Qatar’s energy sector. Qatar encourages foreign investors to aid technology and skills transfer. Investments in other sectors are trickling in. Speaking at Doha’s Industrial Investment Seminar 2014, the Minister of Energy and Industry, HE Mohammed bin Saleh Al Sada said: “There are 670 industrial establishments in the state as of the end of May 2014, with capital reaching QR248 billion ($68 billion), 52% of which is foreign investment.” Some major foreign industrial investments announced in the last couple of years include an LED manufacturing plant with a Korean company and a chemical plant currently under construction by Qatar Industrial Manufacturing Company in partnership with an Indian firm. According to World Investment Report published by UNCTAD, FDI inflows into Qatar declined over the last couple of years. However, it is “more a reflection of the tailing-off in investments following the completion of Qatar’s liquefied natural gas (LNG) expansion,” says NBK’s August 2014 Economic Update.

BUILDING THE ECOSYSTEM Several organisations like Qatar Development Bank, Silatech, Qatar Chamber, Enterprise Qatar and Manateq are working in tandem to create a thriving private sector. Young students are mentored to become entrepreneurs and start-up support services like financing and advisory are made available. Trade shows, informative seminars and training sessions are regularly conducted to provide adequate exposure, networking opportunities and information. EQ recently launched Tadqeeq, an initiative that offers a 70% subsidised audit and accountingsupport facility for start-ups and SMEs. After Jadwa and and Oqod, Tadqeeq is EQ’s third initiative in an integrated package of business development and SME support services. To encourage the culture of equity investing, Silatech, a government-backed agency, plans to launch a QR364 million ($100 million) investment fund to help startup companies prosper. At the fundamental level, students and young entrepreneurs are encouraged through competitions such as Enterprise Challenge Qatar. 2014 saw a higher participation rate with 700 students from 14 schools and nine universities across Qatar participating

INFRASTRUCTURE

“HIA IS CONSIDERED AS AN IMPRESSIVE EDIFICE CONSTRUCTED IN ACCORDANCE WITH THE HIGHEST INTERNATIONAL STANDARDS RELATED TO THE AVIATION INDUSTRY. THE NEW AIRPORT WILL PLAY AN ACTIVE ROLE IN BOOSTING QATAR’S POSITION AS A GLOBAL HUB FOR AIR TRANSPORT.”

HE SHEIKH ABDULRAHMAN BIN KHALIFA BIN ABDULAZIZ AL THANI MINISTER OF MUNICIPALITY AND URBAN PLANNING

PROGRESS 2014-2015 INFRASTRUCTURE

NEW PROJECTS ON THE BLOCK THE MULTI BILLION-DOLLAR INFRASTRUCTURE BUILD OUT HAS CREATED DEMAND FOR SEVERAL ANCILLARY CONSTRUCTION REQUIREMENTS.

atar’ expanding industrial base needs supporting infrastructure, its increasing population needs housing options and the rising number of visitors created a big demand for hospitality and tourism projects. Several new projects were launched during the year to cater to these needs. Here is a sneak peek at some billion-dollar projects - some grand and some functional - to support the growing economy. INDUSTRIAL PROJECTS Economic zones: Manateq is developing three special economic zones (SEZs) that will offer industrial and manufacturing space for the private sector in Qatar. Expecting to give a big push to industrial investments, the zones aim at attracting companies in the logistics, construction materials, energy, manufacturing, technology and other industries. Located on a 4 sq km land adjacent to the Hamad International Airport, Ras Bufontas will be the first of the three SEZs to be developed. Explaining the advantages these clusters have to offer, Manateq CEO Fahad Rashid Al Kaabi said: “The advanced technology cluster at Ras Bufontas brings together activities related to clean manufacturing, supply chain and services in high value-add sectors such as ICT and electronics, energy and environment, healthcare, building systems and aviation.” It provides all essential services required by companies wishing to start operations under one roof, he added. Manateq began the process of appointing a contractor to deliver the infrastructure and landscape for phases one and two in November and expects to complete the first phase in

2017. The second and third phases will be completed in 2018 and 2019 respectively. “Land allocation for investors at Ras Bufontas will be received by the second quarter of 2015, while lands for the first and second development phases will be delivered in the first quarter of 2016”, said HE Sheikh Ahmed bin Jassim Al Thani, Minister of Economy and Commerce, at the groundbreaking ceremony for Bufontas in November 2014. Al Karanaa - the second SEZ spanning 38 sq km - is located half way between Doha and Abu Samra. It will be developed in two phases and delivered in 2019 and 2022 respectively. Located adjacent to New Port Project, south of Wakra, the 33.52 sq km Um Alhoul will be the third SEZ. It will be a manufacturing zone for light industries focused on petrochemicals, building materials, maritime, metals, logistics, food processing, and auto, tools and machinery. Phase one, to be developed in two sub-phases, will be delivered in early 2017 and 2019. Phase 2 is to be delivered by end 2019 and the third phase will begin in 2022. QDB INDUSTRIAL FACILITIES In its annual report for 2013, Qatar Development Bank (QDB) said it was planning to build industrial facilities for the private sector. “Special Projects is studying the feasibility of building 33 small to medium-sized factories in the New Industrial Area,” the Bank’s CEO, Abdulaziz bin Nasser Al Khalifa, said. Logistics Hub: The Government plans to develop three vast stretches of land outside Doha to provide warehousing options for small and medium-sized companies. The land allocated for the three facilities will cover an area of 498,000 sq m, 499,000 sq m and 517,000 sq m respectively. The facility will have open storage spaces and cold storage facilities for

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HE Sheikh Abdullah bin Nasser bin Khalifa Al Thani, the Prime Minister and Minister of Interior, listens in rapt attention as HE Sheikh Ahmed bin Jassim Al Thani, Minister of Economy and Commerce, explains the salient features of the Ras Bufontas special zone.

SMEs in the country. The warehouses are expected to check inflation, reduce transport costs and make local companies more competitive. RESIDENTIAL AND COMMERCIAL PROJECTS Motor City: Barwa Real Estate (Barwa) re-launched the “Motor City” project - the first-of-its-kind automobile hub in Qatar this time on a smaller scale. The QR1.5 billion project is spread over 1.15 million sq m and will be located at Rawdat Rashid, a Doha suburb along the Salwa Road and across from Aqua Park. Originally conceived in 2011 at a cost of QR2 billion, the city was to come up on an area of 2 million sq m in the industrial area. Barwa has leased the land from the Ministry of Municipality and Urban Planning (MMUP) to develop and run the “Motor City” project for 30 years on a build-operate-transfer (BOT) model. Arab Engineering Bureau will provide consultancy services including pre-concept master plan, infrastructure and architectural design. Stressing the need for the project, acting Group CEO Ahmad Abdulla al-Abdulla said” “Many showrooms exhibit cars outside their shops, which is not the right practice. Motor City will solve these problems and provide new opportunities for investors.”

The project will be executed in three phases over a fouryear period. In the first stage, the detailed design will be completed by 2015 while buildings and infrastructure will be completed in the second stage over a two-year period and all other components will be completed in the third and final stage. The showrooms will occupy 34% of the city. The other components are a race track, offices for the Traffic Department, Ministry of Interior, Civil Defence and MMUP, administrative buildings for technical testing, banks and car insurance; commercial units, two hotels, staff housing for families, workers’ accommodation and a driving school. Al Aqaria, a Barwa Group company, announced two new employee housing projects. The QR1 billion community project in Ras Laffan is for employees of RasGas and QatarGas and consists of 850 housing units, a social and sports club, three mosques, a shopping mall and school. The second project costing QR350 million is a residential complex at Mesaieed Industrial City and will provide housing for employees of companies operating there. This is in addition to several employee housing projects under construction in Alaqaria’s portfolio.

Land allocation for investors at Ras Bufontas will be received by the second quarter of 2015, while lands for the first and second development phases will be delivered in the first quarter of 2016.” HE SHEIKH AHMED BIN JASSIM AL THANI Minister of Economy and Commerce

AL FIRJAN MARKETS Qatar Development Bank has joined hands with the Ministry of

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Al Firjan Market project Economy and Commerce to launch Al Firjan Markets, an initiative to create 632 viable retail hubs located within 9 different domestic areas nationwide with a line-up of shops and arcades that cater to household needs. To be executed in three phases, the market will be developed on government property in the remotest parts of the country where shopping facilities are not currently available. This could avoid traffic congestion in the city caused by residents heading to the capital to run their daily errands. HOSPITALITY AND TOURISM PROJECTS Katara Hospitality: Katara Hospitality (Katara) proposes to develop a QR5.82 billion ($1.6 billion) hotel and conference centre named ‘Silver Pearl Hotel’ 1.5 km offshore from Doha. It will be an elevated structure above sea level where visitors will arrive through a 4-lane elevated causeway, a private yacht or helicopter and will have 1,000-plus rooms, a range of restaurants and highend retail commercial spaces. “The total footprint is 135,000 sq ft excluding the marina and causeway and the hotel itself is 1.2 million sq ft excluding the parking and recreational deck,” Manuel Castedo told Progress Qatar, whose New York-based architectural practice M Castedo Architects designed the complex along with a team of worldrenowned engineering firms. The building will consist of two semicircular 30-storey towers separated by a vaulted, climate-controlled atrium over lush gardens with an open view to the ocean beyond. “The building will be supported by a platform on concrete columns similar to a pier structure,” he said. An adjacent structure will house a conference and exposition centre as well as a recreational landscaped roof deck to be

located above a multistorey parking facility. Work is expected to begin once it gets government approvals. “There is significant infrastructure involved and construction cannot start later than 2016 if it has to be completed by 2022,” he said. At night, the building’s stainless steel glass exterior will be lit with LEDs, its reflection creating an illusion of a shimmering pearl glowing brightly in the Arabian Sea. Katara Hospitality is also planning five new hotel projects across Doha. The company launched a concept design competition for international architects with a prize for each of the four winning concepts selected. “The results of the competition are due by year end,” said a source at Katara. Hilton Salwa Beach Resort and Villas: A new waterfront resort, located about 100 km outside of Doha, will be developed by Al Rayyan Hospitality and managed by Hilton Hotels & Resorts, according to reports. The resort is expected to open by the end of 2019, the 362room resort to be located off of Salwa Road, approximately 15 minutes away from Saudi Arabia’s border, will be constructed on 257 acres and will include a water park, marina, dive centre, cinemas, pools, health club, spa, retail space and two small “villages” of family villas. Reef sites: The US-based artificial reef developer Reef Worlds announced it is in talks with Qatar-based waterfront developers to create and restore regional reef habitat off the coast to create a diving and snorkelling attraction. The reef sites would look like ‘ancient lost cities,’ said Dave Taylor, Director of Development, Reef World

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GATEWAY TO QATAR

HAMAD INTERNATIONAL AIRPORT (HIA) WAS CREATED IN TUNE WITH QATAR’S NATIONAL VISION (QNV) 2030 TO DEVELOP THE COUNTRY’S INFRASTRUCTURE, ACCORDING TO ENG. BADR MOHAMMED AL MEER, CHIEF OPERATING OFFICER OF HIA, IN AN EXCLUSIVE INTERVIEW WITH PROGRESS QATAR.

e says: “Qatar is one of the fastest-growing economies in the world undergoing a rapid development process. Our government sees the evolution as a complete equation: economic growth sustained by improvement of facilities and infrastructure upgrade. HIA was created as an integral part of that equation.” The airport is also built to support the continuing growth of Qatar Airways, which now flies to more than 140 destinations worldwide, making Doha a global hub for business and leisure travel. The vision for 2030 has been designed to change Qatar’s dependency on oil and gas and upgrade the country’s utilities and infrastructure, making it more attractive to foreign investors. Ideally positioned at the global crossroads of east, west, north and south, Qatar has the opportunity to become an international hub connecting the world. “HIA is one of the key elements contributing to the improvements in infrastructure that will help secure Qatar’s position as a major player in the global market by encouraging foreigners to invest here,” he said.

HIA is one of the key elements contributing to infrastructure upgrade that will help secure Qatar’s position as a major player on the global market by encouraging foreigners to invest here.” ENG. BADR MOHAMMED AL MEER Chief Operating Officer Hamad International Airport

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HIA can handle Passenger Terminal Complex is capable of handling

8,700

passengers per hour

planes per hour Al Mourjan Business Lounge

10,000 sq m

Upon full completion HIA will handle

retail outlets

2.5

More than

million passengers, million tons of cargo, and

360,000

aircraft per annum

“HIA can handle 90 planes per hour and currently has the capacity to welcome 30 million passengers a year - this will increase to 50 million at its completion. It also offers a unique mix of retail and F&B, which covers 40,000 sq m with more than 70 retail outlets offering an unprecedented selection of designer labels, electronics, gourmet foods and much more. The five-star shopping at HIA is complemented by more than 30 cafés and restaurants offering multiple dining options to every traveler,” he said. According to him, the airport has also implemented innovative solutions to smoothen daily operations like the introduction of self-service check-in machines and an E-gate facility where Qatar residents can scan their ID and fingerprints and proceed through immigration quickly and efficiently.

More than

40,000m² combined retail and F&B space

cafés and restaurants

The latest technology has been applied in both the cargo and catering facilities which offer efficient and premium services to customers. HIA also has a state-of-the-art air traffic control tower equipped with the world’s finest communication and radar technology. “In anticipation of the continuous growth of goods coming into Qatar, HIA’s sophisticated cargo terminal is equipped with new technology and automated systems enabling increased capacity which now stands at 1.4 million tons a year. With the continuing growth of Qatar Airways Cargo, which ranks among the top cargo operators in the world, this will expand to 2.8 million tons a year, making it one of the largest cargo terminals in the world,” he added

PROGRESS 2014-2015 INFRASTRUCTURE

AVIATION ENTERS NEW PHASE

QATAR’S CIVIL AVIATION IS MORE THAN SIX DECADES OLD AND IT ALL STARTED WHEN GLOBAL OIL COMPANIES EMBARKED ON OIL PROSPECTING. THE FIRST RUNWAY WAS BUILT TO TRANSPORT THE PERSONNEL OF THESE COMPANIES, THE SECOND RUNWAY WAS CONSTRUCTED SOUTH OF UMM SAID, AND COMMERCIAL AIR TRANSPORTATION COMMENCED IN THE SECOND HALF OF THE 1950S. DURING THOSE DAYS, THERE WAS ONLY ONE FLIGHT A MONTH.

s commercial air transportation developed, the first small airport, situated in the same location as Doha International Airport, was established. The airport was equipped with all the navigating and handling services, in addition to other services for monitoring regular flights to and from Doha. Since then, there has been no looking back for the country’s aviation sector as Qatar has begun hosting a number of regional and international conferences and exhibitions. Today, building on the geographical advantage of Qatar’s position at the crossroads of the East and the West, the country’s aviation strategy is to develop Doha as a major international hub for both passenger and cargo traffic. In an interview with Progress Qatar, Qatar Civil Aviation Authority (QCAA) Chairman HE Abdul Aziz Mohammad Al Noaimi said that in tune with the National Vision 2030 to build a diversified economy moving away from dependence on hydrocarbons, there has been full support by governmental policies and legislation to build on the infrastructure and invest in technology to create a healthy environment for the planned growth and development of the country’s aviation sector. “QCAA has been working to open Qatar’s skies to the world:

We expect to complete the expansion design and procurement in a phased manner and go into the tender process for the first packages in the last quarter of 2015 or early 2016.” HE ABDUL AZIZ MOHAMMAD AL NOAIMI Chairman Qatar Civil Aviation Authority

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The Hamad International Airport after the opening of the state-of-the-art Hamad International Airport (HIA) earlier this year, we have concluded more than 140 service agreements with different countries, paving the way for our national carrier Qatar Airways to exercise commercial traffic rights,” he said. Simultaneously, Qatar Airways has seen unprecedented growth over the last few years and has been instrumental in positioning the country as a force to reckon with in the aviation industry. With its young, robust and fuel-efficient fleet, the airline now reaches over 140 destinations, tapping both traditional and non-traditional markets, he said. AIR SPACE He said that QCAA has redesigned all routes within the Doha airspace to reduce conflict and congestion and ensure smooth feeding of traffic into the international and military airports. QCAA is also in discussions with senior consultants for establishing a new airway to be used for continuous takeoffs and landings, thereby enabling fuel savings as well as reduction of CO2 emissions. “Within the GCC, we have agreed to have Air Traffic Flow Management (ATFM) for the region to provide a complete representation of all phases of flights and suggest processes to achieve our goals of safe, efficient and to expedite aircraft movement,” QCAA Chairman said. Meanwhile, routes between Bahrain and Qatar have been modified to reduce congestion, especially north of Qatar, where seven routes have been established as R NAV 1, and separated for inbound and outbound traffic.

“Further, a new route - BAT- has been established between Doha and Saudi Arabia for all traffic flying to Jeddah and South Africa. We expect this to further reduce congestion in the airspace north of Qatar,” he pointed out. HIA EXPANSION With the first phase of Hamad International Airport complete, he said that they have moved on to the design stage of the next phases of development, which includes the expansion of the Passenger Terminal Complex, additional taxiways and aprons and other associated facilities. “We expect to complete the expansion design and procurement in a phased manner and go into the tender process for the first packages in the last quarter of 2015 or early 2016,” he said. According to him, the salient features of the expansion will be, in addition to lounges, a 100-room hotel and retail areas within the North Node, extension of Concourses D and E to increase the total number of contact gates to approximately 70 (8 of these are for the A-380s), expansion of the main terminal building check-in areas, expansion of the baggage handling system, Metro Station terminal connectivity, additional taxiways and apron parking and additional hangars. “The timeline for completion of the above is a period approximately three to four years after the tender processes,” he said. On completion of the expansion, passenger capacity will increase to over 53 million per annum. The Passenger Terminal Complex will cover an area of 900,000 sq metres on completion, he added

PROGRESS 2014-2015 INFRASTRUCTURE

TAKING TO THE SKIES

IT WAS A JOURNEY THAT STARTED TWO DECADES AGO ON THE QUEST TO PUT QATAR ON THE AVIATION MAP OF THE WORLD. TODAY, QATAR AIRWAYS, THE COUNTRY’S NATIONAL CARRIER, HAS SUCCESSFULLY TAKEN THE COUNTRY TO THE SKIES. IT IS ONE OF THE FASTEST GROWING AIRLINES WHOSE AIRCRAFT FLEET AND GLOBAL FOOTPRINT HAS EXPANDED TO KEEP PACE WITH ITS AMBITIOUS GROWTH STRATEGY.

atar Airways has competed on routes traditionally served by European and American airlines and emerged as one of the top three Middle Eastern airlines vying for a place under sun in the international skies.

RAPID EXPANSION Backed by deep pockets, Qatar Airways has been able to expand its fleet at break-neck speed. Today the airline operates 139 aircraft to 145 destinations. By 2015, the fleet size will rise to more than 170 aircrafts covering a global network of over 170 destinations. More than 340 aircrafts worth QR254.8 billion ($70 billion) have been ordered. The much-awaited first of the 13 superjumbo aircraft A380 was added to the fleet in September this year apart from two Boeing 787 Dreamliners and one Boeing 777. The A380 was introduced on Doha-London route on October 12 and with 10 more A380-800s on order, the airways is expected to take delivery of four of them before the end of this year. Qatar Airways Group Chief Executive Akbar Al Baker said: “The A380 that we are introducing is not just any A380. We have completely designed every element, giving it a signature touch that has never been seen before on board.” The delivery of Airbus A380 was delayed by three months, it was handed over to the airways in September instead of June, the delay cost the airline more than QR728 million ($200 million) in revenue. Qatar Airways also became the first operator in the Middle East to operate A350-900, which was delivered to the airlines in December. The airways has placed orders for 80 A350s .

The destination additions have mirrored Qatar’s economic interests in the region. For example, in the last 10 years, Qatar Airways has added 7 destinations in China reflecting the increasing economic ties with China. Strategically located between East and the West, Qatar is also trying to become an international transit hub for US-bound traffic. The new Hamad International Airport (HIA), with a substantially higher capacity, is expected to be instrumental in achieving this goal.

The A380 that we are introducing is not just any A380. We have completely designed every element, giving it a signature touch that has never been seen before on board.” AKBAR AL BAKER Group CEO Qatar Airways

PROGRESS 2014-2015 INFRASTRUCTURE

A380 aircraft after its delivery to Qatar Airways After opening in May 2014, HIA reported a 10% year on year passenger increase through its doors in September 2014 compared to the old airport. A total of 2,201,271 travellers departed, transferred and arrived into Qatar during the month. QATAR EXECUTIVE Qatar Executive, the corporate jet division of Qatar Airways, The has entered into an agreement with Gulfstream for the order of up to 20 aircraft, including Gulfstream’s all-new G500 and the G650ER. The Memorandum of Understanding (MoU), signed in October, marked the beginning of a new relationship between Qatar Airways and the jet manufacturer and signaled next step for Qatar Executive’s relatively young and buoyant history. Qatar Executive has completed five years recently, took part in the Middle East Business Aviation held in December where it showcased its Maintenance, Repair and Overhaul facility in Doha. As a Bombardier Authorised Service Facility (ASF) in the Middle East, Qatar Executive holds a wide range of maintenance approvals, such as from the Qatar Civil Aviation Authority (QCAA) as well as EASA Part 145 Line and Base certification to support European and Qatari-registered Bombardier aircraft. An addition, Qatar Executive has regulatory approvals from the Bahrain Civil Aviation Authority as well as the Cayman Islands to conduct maintenance services for Bombardier Challenger 604, 605 and Global series aircraft. Qatar Executive operates a wholly-owned all-Bombardier fleet of eight aircraft, comprising three Challenger 605s, four Global 5000s and one Global XRS; a number set to grow in

the near future when the new Gulfstream aircraft will join the operation. CARGO OPERATIONS QA is aggressively pursuing its cargo strategy and aims to become a global logistics hub. Having moved into the stateof-the-art fully automated cargo facility at HIA it is one step closer to its ambition. Its cargo fleet currently has 10 freighters including three Airbus A330F and seven Boeing 777 Freighters and serves 40 dedicated freighter routes to destinations within Qatar Airways’ global operations, including those not served by scheduled passenger flights like Amsterdam, Liege, Atlanta, Luxembourg, Sialkot and Zaragoza. QA’s cargo operations continued to expand as it launched new freight routes and dedicated services for moving pharmaceutical and perishable products. With the infrastructure in place, traffic has increased. In September 2014, HIA reported a 13.6% increase in cargo traffic, 4.7% rise in mail and 7.6% more aircraft movements. SAUDI VENTURE QA was one of the two international airlines to have been awarded a license to operate domestic flights in Saudi Arabia in late 2012 when the country opened its skies to foreigners. According to media reports, Al Maha Airways will begin services between Riyadh and Jeddah and will deploy 10 aircrafts in its first year and gradually expand to 50 aircrafts. In October, a local daily reported that the airline would start operations in early 2015 and will use a fleet of A320-200 aircraft

PROGRESS 2014-2015 INFRASTRUCTURE

ON THE RIGHT TRACK

THE QR127.4 BILLION ($35 BILLION) QATAR INTEGRATED RAIL NETWORK COMPRISING THREE PROJECTS - THE DOHA METRO (METRO), LUSAIL LIGHT RAIL TRANSIT (LRT) AND THE LONG-DISTANCE PASSENGER AND FREIGHT RAIL (LDPF)IS CHUGGING ALONG TO MEET ITS DELIVERY DEADLINE IN TIME FOR THE FIFA WORLD CUP 2022.

atar Rail, which is responsible for the delivery of the network, is in the process of finalising contractors and consultants for several key components of the project. In another milestone, five of the 21 tunnel boring machines (TBMs), to be used in the Doha Metro project, have reached Doha this year. These machines, once assembled and put to work, will bore through Doha to make way for the underground lines and stations. Excavation has been completed in several parts of Doha, clearing the way for the rail route and stations. Qatar Rail awarded some significant contracts during the year including the QR16 billion ($4.4 billion) Gold Line underground design and build package - the largest single construction package for the Doha Metro - and many more are in the final stages of tendering. LRT enters the final phase of the project with a QR9.9 billion ($2.72 billion) award for the turnkey tram system and LDPF network begins procurement for Phase 1 of the passenger and rail network.

DOHA METRO The 216km Doha Metro network is made up of four lines connecting the city - the Red Line, Green Line, Gold Line and Blue Line. The Metro, linking over 100 stations, will run underground in the city centre and will be at ground level or elevated on the outskirts. Msheireb and Education City will serve as two major interchange stations. The Msheireb station will be a key intersection point for the Red, Green and Gold lines and the Education City station will link the Green Line with the highspeed LDPF network. Work on Phase 1 of the Doha Metro, to be ready by 2019, will “cover 86km of tracks and include 36 substations of which 35 are fully equipped, and a main depot. Of the 35 fully equipped stations, 29 are underground, 4 are elevated and 2 are At-Grade Stations,” said Qatar Rail in an invitation to contractors. Phase 2 of the Metro, to be completed in 2026, will extend the network to 56 stations. “Civil works on 35 stations have been completed,” said Deputy CEO Hamad Al Bishri while addressing contractors at an industry awareness meeting held in November 2014. All underground packages for the Doha Metro have been

PROGRESS 2014-2015 INFRASTRUCTURE

speed of 220-350km per hour and freight trains at 120km per hour. The project consists of a freight rail line from Port Mesaieed to Ras Laffan, a passenger and freight rail line from Doha to Saudi Arabia, a high-speed passenger rail line from Doha to Bahrain, a passenger and freight rail line from Doha to Dukhan and a passenger and freight rail line from Doha to Al Shama. Qatar Rail announced an industry awareness meeting for contractors in March 2014 marking the beginning of the procurement process for the LDPF. “Qatar Rail is carrying out the concept and preliminary design of Phase 1 of the Long Distance network using Systra Parsons Joint Venture and has just entered the procurement phase”, said Mufid Habib, Project Director for LDPF network in a presentation made to contractors during the industry awareness meeting held in March 2014. The first phase includes construction of nearly 143km of operational railway track with 35 turnouts (main tracks), one station, three freight yards, one intermodal yard, 26 bridges and 59 culverts, and will be delivered in 2018. The other three phases will be delivered in 2021, 2027 and 2030, respectively.

To date, more than 7km of the construction of tunnels has been completed and the main civil works for seven underground stations have also been achieved.” ABDULLA ABDULAZIZ AL SUBAIE Managing Director Qatar Rail

awarded. Two key contracts awarded this year include the QR2.38 billion ($654 million) Red Line South Elevated and AtGrade. Two big contracts for the Doha Metro – Red Line North Elevated and Gold and Green Line Elevated and At-Grade – will be awarded anytime. Qatar Rail has chosen a final list of bidders and the winners are to be awarded by the end of 2014. Kicking off the selection process for another mega component, Qatar Rail invited contractors to participate in mechanical, electrical and plumbing (MEP) and architectural works for the Doha Metro in November 2014. “The Metro consists of eight major design and build civil contracts worth approximately QR45 billion ($12.36 billion). Each of them will require the appointment of large-scale multidiscipline MEP subcontractors, Original Equipment Manufacturers (OEMs) and large-scale high-quality architectural works subcontractors,” the invitation said. The selection process has commenced with Qatar Rail releasing the prequalification application in November. The contracts are to be awarded by the end of 2015. LONG DISTANCE PASSENGER AND FREIGHT (LDPF) RAIL NETWORK The LDPF network covering a distance of 350km will be developed in four phases. The passenger trains will run at a

LUSAIL LIGHT RAIL TRANSIT (LRT) The QR10.92 billion ($3 billion) LRT project consists of four operating lines, 33km of network and 37 stations, including 10 underground. The LRT will also be connected to the Doha Metro Red Line North via two main stations – Lusail Marina/The Pearl and Lusail’s main station – facilitating easy transportation from and into Lusail city. The system will be a hybrid between tram and metro, running at grade in the Northern part of Lusail, and underground in the South where the density of development will be greater, and is designed to serve up to 250,000 residents and 400,000 visitors. Briefing on the progress made on the LRT project in July 2014, Abdulla Abdulaziz Al Subaie, Managing Director of Qatar Rail, said: “Todate, more than 7km of the construction of tunnels has been completed and the main civil works for seven underground stations have also been achieved.” A QR9.9 billion ($2.72 billion) deal – the last phase of the project – to build the turnkey tram system in Lusail comprising 35 trains and the final build out of 25 stations and a depot was won by Alstom-QDVC consortium in mid 2014. The first line (yellow line) is expected to commence operations in 2018 and the other lines (green, red and purple) will be functional by 2020

PROGRESS 2014-2015 INFRASTRUCTURE

SKY IS THE LIMIT

ZOOMING LAND PRICES, HIGHER RENTALS AND MORE PROJECT LAUNCHES IN THE AFFORDABLE SEGMENT HAVE BEEN THE KEY TRENDS THAT DOMINATED THE REAL ESTATE SECTOR IN 2014.

rom flashy, opulent and luxurious structures in the first phase of Qatar’s development, the focus has been shifting to the affordable segment. The unmet demand in this segment has managed to keep rents high but several projects have been launched during the year to fill the gap. Steady escalation in land prices could also impact future developments and lead to rent inflation. ZOOMING LAND PRICES Land prices have increased over 50% in the first half of the year and could push up rent inflation, noted Qatar National

Land prices have generally reached a point whereby it makes greater sense financially for the land owner to sell than develop the land. It is unlikely to have any impact on the real estate market in the short term but it could be prohibitive to development, causing shortages in end product over the longer term.” MARK PROUDLEY Associate Director Consulting and Research, DTZ

Bank (QNB) in a September 2014 report. The Real Estate Price Index (REPI) released by Qatar Central Bank (QCB) quarterly shows a 30% increase over a year to 253.8 points in September 2014, indicating a steep increase in Qatar’s property prices; primarily land prices. The REPI represents average prices for Qatar’s residential, commercial and land properties. “The sale prices for lands located between Corniche and D-Ring Road have gone up as high as 15% in the last quarter,” Al Asmakh Real Estate Development (AREDC) said in its latest report. According to the report, “The land market in Qatar is the second interesting investment after residential development. The demand is exceptionally high for lands located in areas around Doha City Centre.” So have land prices peaked? What could be the impact on future developments? QNB predicts a potential overheating of the real estate sector but feels that the prices are still within fundamentals given Qatar’s fast growing economy and rapid population growth. “Land prices have generally reached a point whereby it makes greater sense financially for the land owner to sell than develop the land. It is unlikely to have any impact on the real estate market in the short term but it could be prohibitive to development, causing shortages in end product over the longer term,” says DTZ’s Mark Proudley, Associate Director, Consulting and Research, DTZ. AREDC rules out rapid increases in sale prices in the coming quarters but feels the land market is sustainable. RENTALS MOVE UP The steady rise in land prices has indirectly pushed up rents. Rising land and construction costs increase overall development costs and lead to higher rental expectations. Higher development costs together with tight demand-supply have pushed up rents in the residential segment whereas

PROGRESS 2014-2015 INFRASTRUCTURE

rentals in the office segment are stable but gradually increasing. DTZ’s Q3 2014 report says: “Requirement remains strongest for affordable apartment accommodation. On The Pearl, one and three bedroom apartments are in demand. The availability of good quality three or four bedroom villas in residential compounds also commands a premium. Average monthly rentals have gradually gone up due to high occupancy rates in good quality housing units.” “Compared to Q4 2013, the overall appreciation in rentals was between 5% and 10% in Q1 2014. The areas in and around Doha Municipality have higher demand for leasing leading to higher rental return in these areas compared to the outskirts,” notes AREDC. Rental rates for office accommodation have remained comparatively stable since 2011 but due to higher off take in the past year and lower vacancy rates rentals have started to increase for office stock, states DTZ. Vacancy rates have been higher in the premium West Bay area that offers larger A-grade suites. Smaller office suites on the C and D Ring roads, Doha City Centre and Airport Road comprising B-Grade and C-Grade offices with an average size of 100 sq m are more in demand due to moderate office sizes and low rent, according to AREDC research. “It is possible for larger space users seeking in excess of 5,000 sq m to secure secondary accommodation for as low as QR160 per sq m/month. Small suites of less than 500 sq m command in excess of QR300 per sq m/month sometimes. Rents for good quality office stock in secondary locations range from QR 130 - 150 per sq m/ month,” notes DTZ. QNB predicts rising rents could push up inflation to 4% in 2015-16 compared with 3.4% in 2014. DTZ forecasts the uptrend in office rents - particularly for high-quality small suites - to continue for at least two years. “Strong demand driven by rising population growth continues to outstrip new supply reaching the market. Rental inflation will only ease if new demand (i.e. population growth) slows down or a new wave of projects under construction starts to reach completion.” FUTURE DEVELOPMENTS - FOCUS ON PRACTICAL SOLUTIONS New project launches are expected to fill the gap for affordable residences, worker accommodation and small office spaces. Al Aqaria, a Barwa Group company, has launched a QR1 billion housing project for RasGas and QatarGas employees in Ras Laffan, a labour accommodation complex in Ras Laffan Industrial City and a QR350 million 600-unit residential complex at Mesaieed Industrial City. According to AREDC, “Residential buildings, residential villa compounds and retail shops are the most anticipated future developments. At 6-8%, Qatar’s recovering residential market offers one of the highest returns on investment in the Middle East.” In the commercial segment, many commercial projects under construction in West Bay are on hold due to low occupancy rates but new projects have been launched on the C and D Ring Roads.

GROSS ANNUAL YIELD ON RESIDENTIAL PORPERTIES The Pearl

Yield (%) 7.5

West Bay

Al Mansoura and Bin Dirham

Najma Al Saad

6 8 (Al Asmakh Real Estate Q1 2014 report)

GROSS ANNUAL YIELD OFFICE MARKET Yield (%) West Bay

6.5

C-Ring Road

D-Ring Road

6.5

Al Saad

Salwa Road

Airport Road Others

6.5 6

SUPPLY DISTRIBUTION IN UPCOMING MALLS Space supply (%) Doha Mall

Doha Festival City

Northgate

Gulf Mall

Tawar Mall

Marina Mall

Markhiya Mall

Barwa Al Doha

Mirqab Mall

Mall of Qatar

Dragon Mall at Barwa Commecial avenue

Al Wakrah Mall

Musheireib project retail space

Doha Outlet Mall

2 (Source: AREDC Research)

PROGRESS 2014-2015 INFRASTRUCTURE

REAL ESTATE PRICE INDEX Year

Month

Index

2013

June

178.8

July

174.2

August

176.8

September

178.6

October

184.7

November

184.4

December

189.8

January

194.5

February

195.3

March

209.4

2014

April

216

May

213.8

June

230.6

July

234.7

August

241.5

September

253.8

According to AREDC, nearly 58,871 sq m of land near Ramada Intersection have been planned, segmented and sold to individual purchasers for commercial developments. “Nearly 23 buildings are likely to be delivered with nearly 125,000 sq m of commercial office space in the next two to three years.” Massive worker accommodation projects launched by the government and private parties will also come on stream in the next couple of years. Global Building Solutions’ worker’s accommodation villages and the Ministry of Municipality and Urban Planning (MMUP)’s integrated worker’s communities are some projects in this segment. “Owing to strict implementation of global norms for housing workers nearly 100,000 labourers may be accommodated in new labour camps under construction. Al Baraha and Barwa Recreation City Facility at Al Khor are the major locations for government-established labour camps. The private sector will develop and accommodate nearly 70,000 labourers,” notes AREDC. “DTZ expects high levels of demand for staff housing over the next five years, driven by an influx of migrant workers, but the high cost of land is prohibitive to developing low to middle income housing thereby restricting future supply,” says Proudley. With the current focus on the manufacturing sector, what are the options available in this segment? Mark says: “The real estate market for warehousing is

limited at this time but will increase as new infrastructure projects are completed and a growing population creates greater demand for products.” The supply is currently restricted to the governmentregulated Doha Industrial area. “Several new pipeline projects such as the three new proposed Economic Zones will cater to this demand,” he says. RETAIL AND HOSPITALITY The retail and hospitality segment has several projects under construction that will become functional in the next two to three years. Nearly 14 malls are planned with an approximate net leasable area of 1.228 million sq m. Qatar will have 27 malls in total on completion of all under construction malls, with the expected NLA of 1.8 million sq m. The top three malls – City Centre, Villagio and Landmark – command the highest average rental rate of QR310 per sq m per month. Overall occupancy levels are high in the retail segment and offer yields in the range from 5% to 6.5%, according to AREDC. In the hospitality segment, nearly 29 luxury hotels in the 5- and 4-Star categories are planned that would deliver 8,304 rooms. On completion of all planned luxury hotels by 2022, nearly 22,477 rooms will be available, of which 68% will be in the luxury segment. The overall outlook for the real estate sector looks positive and rents and asset prices may remain firm in the near future, analysts point out

PROGRESS 2014-2015 INFRASTRUCTURE

ON THE MOVE

IT HAS BEEN AN ACTION-PACKED YEAR FOR QATAR’S PUBLIC WORKS AUTHORITY (ASHGHAL) AS WORK ON A SLEW OF HIGH PROFILE PROGRAMMES DESIGNED TO ADDRESS QATAR’S INFRASTRUCTURE NEEDS TOOK OFF.

enders were released for some key programmes including the Sharq Crossing, the New Doha Zoo, the Trauma Mass Hospital and its flagship drainage project - Inner Doha Re-sewerage Implementation Strategy (IDRIS). Significant contract awards were also made in the roads and healthcare segments. ROAD PROJECTS Ashghal’s road building programme has two key projects - the Expressway Programme and the Roads and Infrastructure in Local Areas Programme (RILAP). The former is a QR16 billion seven-year programme that will connect Qatar’s cities, towns and villages through highways running across the country and will be completed by 2017. It includes 34 major projects with 240 multi-level interchanges, over 980 km of new roads and a number of underpasses and flyovers that will improve traffic flow and reduce congestion and travel times. Under the Expressway Programme, Ashghal has completed the construction of the Salwa road project that will serve as a strategic corridor between Doha and the Saudi border. Fifteen expressway projects are now under construction and all remaining work packages have been awarded to design and supervision consultants, according to Ashghal. US-based KBR is the programme management consultant for the Doha Expressway Programme. The QR50 billion RILAP includes developing and upgrading local roads, drainage and new infrastructure across the country’s five regions – Qatar North, Qatar South, Doha North, Doha South and Doha West. Under this programme, more than 200 projects will be delivered in the next five to seven years and 16 major projects are currently under construction. Parsons Brinkerhoff is the program management consultant. Ashghal awarded seven contracts for road projects valued at QR10 billion in January 2014. This was followed by three contracts worth QR12.6 billion in March for key Expressway projects – two for the design and construction of the New Orbital Highway and Truck route and the third for the design and construction of the Al Wakra Bypass Road encompassing approximately 11 km of new dual carriageway.

SHARQ CROSSING The ambitious Sharq Crossing project estimated to cost QR18.2 billion ($5 billion) took off early this year. Ashghal is in the process of selecting eligible companies to participate in one of the most technologically advanced and complex projects to be undertaken in the country. The 12km project, designed by renowned architect, engineer and artist Santiago Calatrava, will include three bridges interconnected by 8 km of subsea tunnels. The bridges spanning a length of 600m to 1,310m will each link Doha’s new Hamad International Airport with the city’s cultural district of Katara in the north and the downtown central business district of West Bay. Ashghal hosted an industry engagement day in April 2014 to inform the contracting community and operation and maintenance organisations of the opportunities available and invited companies to register their interest to participate

There has been a steady progress on the Public Works Authority’s ongoing nationwide infrastructure programme and the remarkable hike in the allocation of funds this financial year compared to the previous year has accelerated the works.” ENG NASSER BIN ALI AL MAWLAWI President Ashghal

PROGRESS 2014-2015 INFRASTRUCTURE

FUTURE PLANS Ashghal will take up 14 new road projects worth approximately QR20.31 billion next year as part of the Expressway Programme, according to the Authority’s annual report for 2013-14, which was released in November this year. As many as 12 projects worth QR18.21 billion have been taken up so far. This year saw completion of four major roads and 11 expressway projects are currently under different phases of construction across Qatar, the report said. Ashghal President Eng Nasser Ali Al Mawlawi said there has been steady progress in the Public Work Authority’s ongoing nation-wide infrastructure programme and with more funds being allocated during this financial year compared with the previous year, the works have gathered momentum. Ashghal has awarded works worth approximately QR12.9 billion in 2012-13 and the figure tripled to QR38.4 billion this financial year, Mawlawi said.

in the project. Companies who made through first stage of the selection process have been invited to participate in the second stage, says Ashghal on its website. The companies selected in the second stage of prequalification will later be invited to tender. The contract will be awarded in 2015 and the project is to be completed by 2021. The US-based Fluor was selected as the programme management consultant in 2013. INNER DOHA RE-SEWERAGE IMPLEMENTATION STRATEGY (IDRIS) The Inner Doha Re-Sewerage and Implementation Strategy (IDRIS) will overhaul the sewerage infrastructure in Doha’s south catchment area and will meet the long-term demands of the area for the next 50 years and serve an additional population of one million. The project is expected to cost QR10 billion and will be completed by 2019. The programme will involve building tunneled interceptor sewers and advanced sewage treatment works and will remove over 35 existing pumping stations. It will provide a long-term wastewater treatment solution to serve the needs of Doha, Al Wakra and Messaieed. IDRIS will be divided into six contract packages. Package 1 covers the lateral interceptor sewers; the main trunk sewer comes under package 2; the terminal pump station and New Doha South sewage treatment works will come under package

3 and 4; package 5 will be the treated sewage effluent return system and the final package will involve decommissioning the existing facility. Ashghal has released three tender documents for design and construction of the main trunk sewer to shortlisted companies earlier this year. The three contracts are to be awarded in early 2015. THE NEW DOHA ZOO Qatar’s New Doha Zoo spread over 75 hectares – seven times the old zoo in Doha – is one of the few green field zoos being constructed in the world. A drive-through safari displaying animals and plants from around the world in environment’s set to mirror natural habitats of an African savannah, an Asian jungle and a South American rainforest are some of the planned attractions. The zoo is expected to open to visitors by 2017. Ashghal has awarded two zoo-related contracts totaling approximately QR118 million for enabling works and to design and build the animal relocation facility at Rawdet Al Faras. The site preparation and enabling works to prepare the site for main construction has commenced. Several contracts related to the works were also released during the second quarter of 2014. Some key contracts include those for a construction supervision consultant for main works, a contractor for the design and installation of river rides, and the design and construction of the bio-dome. HHCP+PJA, the American specialist zoo design consultants, are the master planners and concept design consultants, whereas KEO International will supervise its design and construction. HEALTHCARE PROJECTS Ashghal is also executing a number of healthcare projects including the proposed new medical city and a 1,100-bed Trauma Mass Casualty Hospital to be located adjacent to Qatar University. It is in the process of selecting a project and construction management consultant for the project. The project is anticipated to commence by the first quarter of 2015 and be completed by 2022. In addition, contracts worth QR1.077 billion were awarded for new projects. This includes a QR222.6 million contract for a 500-bed annex to Al Khor Hospital of Hamad Medical Corporation, a QR208 million simulation centre at Hamad Medical City, an annex at the emergency section of Hamad General Hospital and a contract for design, construction and supervision of the National Health Laboratory at Mesaimeer. A design and construction supervision contract for five new health centres in Al Mashaf, Al Wakrah, Ain Khaled, Al Shamal and Al Khor were also awarded

PROGRESS 2014-2015 INFRASTRUCTURE

SUPPORTING GROWTH

QATAR GENERAL ELECTRICITY & WATER CORPORATION (KAHRAMAA) HAS A MASSIVE TASK AT HAND – TO ENSURE THE SMOOTH SUPPLY OF POWER AND WATER TO KEEP UP WITH THE GROWING DEMANDS OF THE NATION. QATAR HAS PUMPED CLOSE TO QR60 BILLION IN THE LAST DECADE, SPRUCING UP THE UTILITIES SECTOR TO SUPPORT MASSIVE GROWTH.

t QR80 billion, the expected investments are even bigger in the run up to the 2022 FIFA World Cup. Several mega projects in the electricity and water segments are under implementation or in the planning stage to meet the growing demand.

GROWING NEEDS Growing population, rising lifestyles and the take-off of mega projects have increased the appetite for water and electricity. To keep pace, the installed power generation has been expanded to 8755 MW by the end of 2013 as compared with 4,032 MW in 2008, according to Kahramaa’s 2013 sustainability report. Transmission network expansion followed, taking the number of main substations to 240 by end 2013 compared with 139 main substations in the second quarter of 2008. There were more than 10,000 distribution substations by the first quarter of 2014 and by 2017 there will be 12,000 distribution substations. Water demand is expected to reach 361 million gallons per day (MIGD) by 2020, a growth of 10% a year, and more than four times the demand of 83 MIGD recorded in 2000, notes the 2013 sustainability report. LONG-TERM STRATEGY Keeping in mind the future demand and supply scenario, Kahramaa launched its long-term strategy up to 2030 in April

this year. HE Dr Mohamed bin Saleh Al Sada, the Minister of Energy and Industry, said that the strategy and the new vision, mission, and objectives were part of the development that Qatar’s electricity and water sectors had witnessed in the last six decades. “Kahramaa will contribute to the achievement of the four pillars of Qatar National Vision and Qatar National Development Strategy just as desired by The Emir, HH Sheikh Tamim bin Hamad Al Thani,” the Minister said. KEEPING PACE WITH DEMAND At a peak demand of 6000 MW in 2013, Qatar enjoyed an excess capacity of over 2000 MW. However, the authority is constantly augmenting capacity to meet future demand. On the generation side, Facility D, to be located in the Qatar Economic Zone near Doha, is the next big Independent Power and Water Plant (IWPP) to be built in Qatar. For the first time, Qatar will use reverse osmosis technology on a large-scale project for its desalination component. Qatar’s power and transmission plan that aims at building an efficient transmission network is currently in its 11th phase. Construction of Phase 11 of the transmission network is currently underway and the tendering process for Phase 12 has begun. Kahramaa awarded contracts worth QR7.7 billion for Phase 11 of the plan during the year. Under the first stage of Phase 11, cables covering a length of 948.6km will be laid, 32

PROGRESS 2014-2015 INFRASTRUCTURE

capacity of 2,300 million imperial gallons per day (MIG) in 24 concrete reservoirs and Phase 2 will take the total storage capacity to 3,800 MIGD in 40 concrete reservoirs. The water security mega reservoirs project is one of the largest in the world and each reservoir built under the plan will also be the largest of its type.

HE Dr Mohamed bin Saleh Al Sada, Minister of Energy and Industry, signing agreement with officials of various companies at a contract signing ceremony in May 2014. substations will be constructed and 43km of overhead lines (OHLs) will be dismantled. The second stage of Phase 11 will include commissioning of 20 substations comprising 14 main substations and six framework substations, cables covering a length of 82.1km will be laid and 54.5km of OHLs will be dismantled. According to Kahramaa, the entire work is to be completed in 44 months. Keeping up with its transmission expansion plans, Kahramaa began the tendering process for Phase 12 in 2014. The authority is also in the process of appointing consultants to advise it on long-term future capacity requirements and how to plan for it. In the water sector, Kahramaa plans to invest QR3.2 billion in the next five years, the sustainability report said. The authority is in the process of updating its water strategy and developing a new water law. The water law, to be developed by 2016, aims at an integrated water management system that will take into account the quality standards for desalinated, ground and waste water and will set unified standards to raise the efficiency of the network. AUGMENTING WATER STORAGE The construction of the first phase of the mega reservoirs project to increase Qatar’s emergency storage capacity to seven days is to begin in the first half of 2015. The mega reservoirs and pumping stations will be constructed at five strategic locations along the Qatar National Utility Corridor in Umm Birka, Umm Slal, Al Thumama, Rawdhat Rashid and Abu Nakhla. Phase 1 of the QR10.9 billion project will create a total

PILOT SOLAR PROJECT TAKES OFF Work on Qatar’s pilot project for generating solar energy took off with Kahramaa tendering the EPC contracts for the first 10 MW turnkey solar photovoltaic (PV) plant on the rooftop of Duhail Water Reservoir pumping station in mid-2014. The plant, located on an area of 110,000 sq m, constitutes the first phase of Kahramaa’s plan to generate 200 MW of solar power - equivalent to 2% of Qatar’s installed electricity capacity by 2020. Announced during the UN COP18 summit, the project will be executed through a distributed generation model whereby 10-15 MW PV plants will be installed on the rooftops of Kahramaa’s pumping stations rather than a large-scale single location plant. The strategy helps optimise the use of redundant flat surfaces such as roofs of grid stations and water reservoirs, makes efficient use of Qatar’s limited land resources and is cost effective. The Duhail solar plant is the first of the multiple smallscale power plants that will come up across the country. Kahramaa plans to launch the second phase of the project based on the results of the Duhail project and is also looking at the possibility of roping in the private sector. This project is a significant step towards Qatar’s aim to derive 20% of its energy needs from renewable sources. According to media reports, the first phase of the project could cost Kahramaa QR120 million ($33 million). The pilot project in Duhail will be connected to Kahramaa’s power grid and the PV panels for the plant will be supplied by QSTec’s poly silicon manufacturing plant. GCC NETWORK INTEGRATION Qatar’s electricity network is currently interconnected with other GCC countries through a 400KV GCC Interconnection Authority Network that allows member countries to exchange electrical power during emergencies. Options are also being explored to use the connection for commercial purposes and promote energy trading. GCC countries are also planning to interconnect GCC through Turkey in a bid to develop an international network. Simultaneously, the feasibility for a regional water network is also currently being studied. The project could lead to a long-term integration strategy and increase water security in the region

PROGRESS 2014-2015 INFRASTRUCTURE

ZONES OF PROSPERITY

WORK ON THE THREE ECONOMIC ZONES THAT ARE COMING UP IN THE COUNTRY IS GOING AT A HECTIC PACE AND THE FIRST PHASE OF TWO OF THEM IS EXPECTED TO BE READY BY MARCH 2017.

he economic zones are coming up at Ras Bufontas, Al Karanaa and Um Alhoul and are being established by the government-owned firm Manateq (earlier it was Economic Zones Company), which was set up a few years ago by the Ministry of Business and Trade with an authorised capital of QR5 billion. At the core of this project is the provision of three world– class business parks with serviced land ready for companies to construct their own buildings; ready-to-occupy manufacturing, warehouse and office accommodation; as well as a range of commercial, showroom and residential accommodation options. As Qatar continues to work to diversify its economy and build on its success in non-oil related business, the development of private sector-friendly, well-serviced and managed modem economic zones is seen as an important way to accelerate the process. The three zones would be contributing to the growth of a knowledge-based economy and also offer investors a world class business environment. The government is keen to invest in the sectors like logistics, information and communications, healthcare, energy and environment, building high-tech global and specialised warehouses, building materials, machinery and fabrications, specialised spillover industries, safety and maintenance, petrochemicals, maritime, metals and others such as auto, tools and machinery. There will be a seamless flow of goods to and from other parts of the region and the world as the three economic zones are strategically located within the GCC and also due to their proximity to the upcoming world-class New Doha Port project and the existing airport facilities. This is further complemented by a no duty policy in the GCC (on-shore) and low import duties and exemption for machinery/raw material importation. Manateq CEO Fahad Rashid Al Kaabi said that an economic

zone has been a tried and tested concept that facilitates overall economic activity and growth strategy. Significantly, economic zones also enable the piloting of new policies and approaches, and allow for more efficient government supervision of enterprises, provision of offsite infrastructure, and environmental controls. The benefits offered by Manateq’s economic zones include providing a region-leading ease-of-doing-business process. “This entails other services such as our ability to secure employment visas for expatriate workers, availability of competitively priced power, water and gas supply, and a distinctly world-class zone infrastructure and services,” he

An economic zone has been a tried and tested concept that facilitates overall economic activity and growth strategy. Significantly, economic zones also enable the piloting of new policies and approaches, and allow for more efficient government supervision of enterprises, provision of offsite infrastructure, and environmental controls.” FAHAD RASHID AL KAABI CEO, Manateq

PROGRESS 2014-2015 INFRASTRUCTURE

RAS BUFONTAS: An advanced technology and logistics cluster, Ras Bufontas is located approximately on an 4 sq km area adjoining the New Doha International Airport, the economic zone targets logistics, information and communications, healthcare, energy and environment, hi-tech building, and global warehousing companies. Phase I will be completed by March 2017, Phase II by April 2018 and Phase III by June 2019. AL KARAANA: Al Karaana is a specialised industries and logistics cluster on an located approximately on 38.43 sq km area half way between Doha and Abu Samra. The target sectors include building materials, machinery and fabrications, specialised spillover industries, safety and maintenance, specialized warehouse and logistics. Phase I will be completed by November 2019 and Phase II is likely to start in 2022. UM ALHOUL: A light manufacturing zone, it is coming up on a 33.52 sq km area adjoining the New Port Project, just south of Wakrah. It is focused on petrochemicals, building materials, maritime, metals, logistics, food processing and others such as auto, tools and machinery. The first part of Phase 1 will be commissioned by March 2017 and the second by February 2019. Phase II of the project will be completed by December 2019 Phase III will start in 2022.

said. Additionally, Manateq provides a single window for all administrative queries, as well as all the necessary support facilities and services that help promote profitability and growth for its investors. “Manateq was created mainly to spur the development and growth of SMEs and the private sector in Qatar. Therefore, it is

meant to encourage entrepreneurship among Qatari nationals and local residents. Having adopted the specialised economic zones model, we aim at providing major advantages,” he said. OPPORTUNITY FOR EXPORTERS Since the New Doha Port Project is expected to be ready in 2016 and more expats will be arriving in the coming years, imports are bound to grow and the scope for exports to markets in different countries is also abound to increase for local manufacturers. “The purpose of setting up these economic zones can be realised faster if the government enters into Free Trade Agreement (FTA) with the US,” said Walid Agal, HR and Marketing Director of Industrial and Equipment Services. “Other countries in the region such as Bahrain, Oman, and Jordan have signed FTAs with the US and the companies were able to take advantage of the No Qouta No Import Tax provision in the agreement,” Agal said. This will enable local firms and investors to export their products to the US, which is the most important and biggest market in the world. “Jordan is already exporting thousands of containers of products to the US every year from its Qualified Industrial Zones (QIZs) and with the New Doha Port Project also set to open in 2016, local exporters can maximise their gains,” Agal said

ICT & TELECOMMUNICATION

“THE QATARI DIGITAL LANDSCAPE IS HEALTHY AND A VIBRANT ICT SECTOR IS DUE TO THE EXISTENCE OF LEGISLATIONS THAT REGULATE IT.”

HE DR HESSA AL JABER

MINISTER OF INFORMATION AND COMMUNICATIONS TECHNOLOGY

PROGRESS 2014-2015 ICT & TELECOMMUNICATION

DIGITAL FUTURE IS HERE

IN TUNE WITH THE GOALS SET BY QATAR NATIONAL VISION (QNV) 2030, THE MINISTRY OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) SECTOR MADE RAPID STRIDES MOVING TOWARDS A DIGITAL FUTURE IN 2014.

ome of the notable achievements of the ICT sector have been the launch of the Qatar National Broadband Network (QNBN) in October, the establishment of the Communication Regulatory Authority (CRA), and the launch of Qatar’s first satellite Es’hail 1 (in the last week of December 2013)

Q-Post needed to be developed in order to become a reliable mail operator that is able to compete and be selfsufficient by 2018.” HE DR HESSA AL JABER Minister of Information and Communication Technology

which has boosted the country’s broadcasting as well as communication services and moved it towards a digital future. An integrated communication infrastructure was also set up to meet the demand in the coming years through companies such as Es’hailSat, Ooredoo, Qatar National Broadband Network, Vodafone Qatar and MEEZA. As part of QNBN, a 10-year plan has been finalised to ensure that broadband technology reaches all its citizens, while the CRA has designed the quality service framework and endorsed and revised a copy of the National Numbering Plan. For ICT consumers, the Ministry has established a consumer protection department within the CRA in order to create awareness among them about their rights. Internet services were extended to the Shahaniya and Umm Slal parks, bringing the total number of iParks to nine, while these services were upgraded in three public places in Doha that were covered by the iParks initiative. ICT GROWTH Addressing QITCOM 2014 in Doha, Minister of ICT HE Dr Hessa Al Jaber said that Qatar’s telecom sector is expected to grow by nine to 12% over the next five years. The sector grew 11%, from QR7.6 billion in 2012 to QR8.5 billion in 2013. International Data Corporation said that Qatar’s ICT spending is predicted to increase at a rate of 7.4% a year to QR17.1 billion by 2018, Strategy & (formerly Booz & Company) said that the nation’s IT market is likely to grow at the rate of 10% per annum, reaching approximately QR24.7 billion by 2016. The Minister called for more investment in the local market

PROGRESS 2014-2015 ICT & TELECOMMUNICATION

in order to improve the quality of services that serve the actual needs of customers. She also said that service providers should work closely with the Telecommunications Regulatory Authority to create a regulatory environment that serves their interests. The findings of Qatar’s ICT Landscape 2014 showed that internet usage and penetration have been high among households and individuals in the country on par with near, universal levels, and the mobile penetration has crossed 100%, while broadband penetration is high with speed and affordability the only issues to be addressed. According to the Global Information and Technology Report 2014 (GITR), Qatar ranked first among the Arab nations and 23rd among 148 countries in the world as far as the Networked Readiness Index was concerned. In the Measuring the Information Society (MIS) report, released in November this year, the International Telecommunications Union (ITU) said that Qatar has moved the country eight places above – from 42nd rank in 2012 to 34th rank in 2013. The report said that Qatar is among the dozen “most dynamic countries” in the world which have recorded above-average improvements in their IDI rank over the past 12 months. Other countries include the UAE, Fiji, Cape Verde, Thailand, Oman, Belarus, Bosnia and Herzegovina, and Georgia. Legislation such as the Critical Infrastructure Information Protection Law was approved by the Cabinet while the government was working on the Data Privacy Law to ensure that personal data details would remain confidential. Q-POST The Ministry formed a committee to oversee the modernization programme of Qatar Postal Services Company (Q-Post) and also developed the Qatar National Cyber Security Strategy to safeguard the nation’s interests. “Q-Post needed to be developed in order to become a reliable mail operator that is able to compete and be self-sufficient by 2018,” the ICT Minister said. The minister said the public lacked awareness of Q-Post services despite the availability of many of these services electronically. “Efforts should be taken to develop regulations for the postal sector in order to provide appropriate services meeting customers’ needs, ranging from individuals to corporates, and also to develop the infrastructure of networks, systems and postal services.”

QATAR’S POSITION ON INTERNATIONAL INDICES INDEX

2012

2013

2014

Global competitiveness

Network readiness

ICT development

e-gov development

e-participation

Global innovation index

Web index

IMPRESSIVE PERFORMANCE BY VODAFONE QATAR Launching of 4G services, making first dividend payments to its shareholders and also winning the Best Telecom award are some of the achievements of Vodafone Qatar, the second telecom service provider in Qatar, in 2014. Vodafone Qatar also increased its customer base to over 1.3 million – 63% of the population – in the last five years of its operations in Qatar. The Best Telecom Company award was presented at the Arabian Business Awards 2014 in recognition of the company’s outstanding performance over the past year.

The new 4G network for a world-class mobile data experience allows customers to take full advantage of superfast speeds with access to exclusive content and music. On the CSR front, the focus is on continually giving back to the community through the Vodafone Qatar Charitable Fund; their annual World of Difference programme which identifies and supports social entrepreneurs; their partnership with ROTA and their Vodafone for All accessibility initiatives with MADA, to name a few. In May 2014, AmanTECH, Vodafone Qatar’s aid programme for online child and youth safety, was launched with the aims of promoting digital literacy amongst parents and improving children’s digital safety.

PROGRESS 2014-2015 ICT & TELECOMMUNICATION

LINKING QATAR TOTHE WORLD

THE COUNTRY’S FIRST TELECOM MAJOR OOREDOO (FORMERLY QTEL) HAS MANY REASONS TO SMILE WHILE LOOKING BACK AT 2014.

oredoo has declared 2014 as the Year of Digital and the company has not only upgraded the existing 4G network but also introduced 4G+ in November 2014, showcasing a smart living home for the first time in Qatar, launched its operations in Oman and Myanmar, besides organising the International Telecommunications Union (ITU) conference in December. It has also partnered with Nokia Networks and China Mobile to set a record-breaking speed of 4.1 Gbps, which means its subscribers can download a 5 GB high-definition movie in 11 seconds and simultaneously upload a five-minute 30 MB video clip from a concert in less than a second. VARIOUS SERVICES Ooredoo has been offering various services tailored to meet the needs of consumers and businesses across the MENA and

“I am humbled by the warm welcome we have received from the people of Myanmar, and by their dedication to improving their lives with technology. We are committed to continuously improving our service so we can meet our promise of giving people better life chances.” HE SHEIKH ABDULLAH BIN MOHAMMED BIN SAUD AL THANI Chairman Ooredoo Group

South East Asia. It was named “Best Mobile Operator of the Year” at the World Communication Awards 2013. As of September 30, 2014, the Group’s consolidated customer base stood at 95.7 million as against 89.6 million for the same period in 2013. Revenues decreased to QR24. 84 billion compared with QR25.48 billion for the corresponding period in 2013. Another notable achievement was breaking the one million customer milestone in Myanmar, less than three weeks after going live with its services. Ooredoo Group Chairman, HE Sheikh Abdullah Bin Mohammed Bin Saud Al Thani, said that the response from customers has been “humbling, such as one of our first customers - a father - who saw how this would give his son access to better education opportunities.” “I am humbled by the warm welcome we have received from the people of Myanmar, and by their dedication to improving their lives with technology. We are committed to continuously improving our service so we can meet our promise of giving people better life chances,” he said. CSR ACTIVITIES As part its ‘Go Green’ programme, Ooredoo has stopped sending paper bills to business customers who use its electronic billing options. However, it has been providing paper-based billing for business customers who need to receive them for specific and agreed business reasons. Ooredoo has signed a partnership with the Qatar Cancer Society to build and support a new state-of-the-art cancer awareness centre in Doha, “The Ooredoo Cancer Awareness Centre.” The agreement was signed by the Ooredoo CEO, Sheikh Saud Bin Nasser Al Thani, and the Head of the Qatar Cancer Society, Sheikh Dr Khalid Bin Jabor Al-Thani, at a special ceremony in March 2014. The Centre will be Ooredoo’s biggest CSR project of 2014, supporting the Qatar Cancer Society not only in the construction of the Centre, but also with funding for the facility for a further five years.

CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENT

“OUR AIM IS TO PRESERVE THE ENVIRONMENT AND NATURAL RESOURCES FOR FUTURE GENERATIONS AT THE SAME LEVEL AS AT PRESENT, AND THE YOUTH HAVE A HUGE ROLE TO PLAY IN OUR EFFORTS BY CREATING IDEAS AND DEVELOPING A SOCIAL CURRICULUM.”

H E AHMED AMER AL HUMAIDI MINISTER OF ENVIRONMENT

PROGRESS 2014-2015 CSR & ENVIRONMENT

A “RESOURCEFUL” WASTE

QATAR’S ECONOMIC GROWTH IS UNMATCHED IN THE WORLD AND SO ARE ITS HUGE MOUNDS OF SOLID WASTE, A RESULT OF RISING INCOME LEVELS, RAPID INDUSTRIALISATION AND URBANISATION, INCREASING STANDARDS OF LIVING AND ALSO POPULATION EXPLOSION, IF STATISTICS FOR THE LAST FEW YEARS ARE INDICATION.

There should be no reason to worry as this is a natural development considering the amount of construction that is taking place in the country in view of various infrastructure projects. What the government should think about is how to dispose of this rubble.” MICHAEL NAGY Environment Statistics Expert Qatar Statistics Authority

he solid waste generated by Qatar has grown by 50% in the last five years - from 8,200 MTs in 2008 to 12,163 MTs in 2013. Of this, 77.2% is from the construction sector while domestic waste accounted for 7.7%. The rest comprised of hazardous, industrial and other effluents. While recycling is one of the best options, other methods like incineration and land refill are being taken up to keep the problem under control. This may not last long as the solid waste is growing exponentially and other measures need to be taken. “There should be no reason to worry as this is a natural development considering the construction activity that is taking place in the country in view of various infrastructure projects. What the government should think about is how to dispose of this rubble,” says Michael Nagy, Environment Statistics Expert at Qatar Statistics Authority (QSA).

PROGRESS 2014-2015 CSR & ENVIRONMENT

A big relief is that the construction waste poses no threat to the environment and can be recycled for laying new roads, fillling quarries etc but it is the domestic waste that is causing concern among waste management experts. The Domestic Solid Waste Management Centre (DSWMC) at Mesaieed was set up by Keppel Seghers in 2011 with an installed capacity of 2,300 MT per day but the domestic waste generated is more than 2700 MT per day at present. The plant is the only one of its kind in the country, and also in the region, and working to its full capacity. The remaining 400 MTs is sent to land refill every day. The Centre has waste separation and recycling facilities, an engineered landfill, a composting plant that can generate 800 tonnes of green waste per day, and a 1,500 tonnes per day Waste-to-Energy (WTE) incineration plant that can produce about 48.4 MW of power. Of this, 15.4 MW are consumed by the Centre and the surplus power is supplied to Kahramaa through the power grid. CONCRETE RECYCLING Another example of what can be done with the growing solid waste, which is particularly relevant to Qatar as it prepares for the FIFA World Cup, is concrete recycling, an increasingly common method of utilising the rubble generated from renovating or demolishing existing concrete structures. “The domestic waste generation is growing at the rate of 10% per year and the government is conscious about the problem,” says Stefan Kipp, Regional Director for MENA

“The main challenge in recycling the waste is to find a market both locally and internationally. There is overall potential for recycled products such as steel, aluminium, paper and plastic products and the government has to take a decision on the issue.” STEFAN KIPP Regional Director, MENA Keppel Seghers

Keppel Seghers. Kipp says the government is looking at different options and they have also submitted a proposal which is under evaluation. “We have plans to more than double current day capacity so that we can meet the growing demand to treat the domestic waste in the coming years,” Kipp says. As far as recycling is concerned, the fly ash generated as a result of incineration of 1500 MTs of waste every day can be re-used as construction material. Besides, these products can also be exported to other countries where there is such

WASTE GENERATED 2008-2013 METRIC TONS 14,000,000

0.8%

0.2%

12,000,000

14.8%

10,000,000

8,000,000

6,000,000

77.2%

4,000,000 Other Tires 2,000,000

Bulky

7.7%

0 2008

2009

2010

2011

2012

Construction Domestic

2013

source: Ministry of Development Planning and Statistics.

PROGRESS 2014-2015 CSR & ENVIRONMENT

The other solution is that the government should encourage the recycling industry by offering some incentives which will go a long way to achieve the desired objective. It will also help in the development of the recycling industry in the country.” VENUGOPAL General Manager Al Haya Waste Management and Projects

a demand. “The main challenge in recycling the waste is to find a market both locally and internationally. There is overall potential for recycled products such as steel, paper and plastic products and the government has to take a decision on the issue,” Kipp says. COMMERCIAL ANGLE There is a commercial angle to this as the waste has tremendous market potential. In its report, Qatar Development Bank (QDB) says the revenue potential from solid waste cannot be ignored: it is estimated to be around QR2.42 billion ($663 million) by way of recycling and also by producing energy, a practice which is in vogue in other countries. The report also says that recycling household refuse would fetch QR979.16 million ($269 million), the commercial collection QR986.44 million ($271 million), construction and demolition debris QR387.25 million ($104 million), industrial QR10.92 million ($3 million) and hazardous QR58.24 million ($16 million). Qatar, whose population is over 2.17 million, generated 28,000 tonnes of garbage per day in 2012, up from 7% in 2011, most of which included debris from construction material, domestic refuse, commercial and hazardous wastes.

There should be mandatory segregation at source by all companies and individuals, cap the amount of waste disposal by the people and free access to landfills must be controlled and monitored by the authorities to reduce the per capita waste generation.” SALMAN SHABAN Manager (Commercial) Lucky Star Alloys

The country has one of the highest per capita waste generations in the world, ranging from 1.6 to 1.8 kg per person per day. Of the total waste, 92% goes to the three landfills Umm Al-Afai for bulky and domestic waste, Rawda Rashed for construction and demolition waste, and Al-Krana for sewage wastes - 4% is incinerated and the remaining is recycled. CREATE AWARENESS One positive aspect is that the efforts of various government agencies in creating awareness has succeeded to some extent and this was evident in the findings of Qatar Energy and Industry Sustainable Report 2013, which was released in June this year. The findings say that 36% of waste was recycled in 2013, which was 2% short of the national target of 38% to be achieved by 2016, and there was a reduction of 2.2% in the purchase of fresh water. As much as 24.5 million cubic metres of water were recycled by the sector and there was a reduction of 9% in NOx emissions, the report adds. Al Haya Waste Management & Projects Company General Manager Venugopal says there are many ways to reduce waste generation. One of which is creating awareness among people about its adverse impact on the environment. A more strategic approach would be to segregate the waste at its origin, which could result in an increase in reuse of the waste and a reduction in the landfill. “The other solution is that the government should encourage the recycling industry by offering some incentives which will go a long way to achieve the desired objective. It will also help in the development of the recycling industry in the country,” Venugopal adds. “There should be mandatory segregation at source by all companies and individuals, cap the amount of waste disposal by the people and free access to landfills must be controlled and monitored by the authorities to reduce the per capita waste generation,” says Salman Shaban, Manager (Commercial) at Lucky Star Alloys, a company which is engaged in dealing with recycling of metals in Doha for the last four decades. According to Oxford Business Group (OBG), though the landfill option is again being utilised to dispose of excess domestic waste, this is not seen as an environmentally sustainable long-term solution, given the limited available land for this purpose. Shaban too says landfills can never be a viable option for any country as they damage the environment in terms of air and land pollution. “If free access is given to the public and private sector to dispose of waste into landfills then there will not be any motivation or systematic approach to recycling,” Shaban adds

PROGRESS 2014-2015 CSR & ENVIRONMENT

IN THE RIGHT DIRECTION

ACHIEVING ECONOMIC PROSPERITY BY UTILISING THE VAST OIL AND GAS RESERVES IN THE COUNTRY WITHOUT DEGRADING THE ENVIRONMENT SHOULD NOT ONLY BE DONE BUT ALSO SEEN AND QATAR HAS BEEN AT THE FOREFRONT IN MAKING PUBLIC THE SUSTAINABLE DEVELOPMENT REPORTS MORE THAN ANY OTHER COUNTRY IN THE REGION.

s many as half of the 36 companies in the energy and industry sectors including state-owned entities (compared with 11 in 2012) have published sustainability reports for 2013 highlighting the efforts made by them to improve their performance in the conservation of nature. The Health Safety and Environment Regulations and Enforcement Directorate (HSERD) is planning to support 28 companies and encourage them to publish their sustainable development reports by 2015. More than half of these companies have even chalked out a five-year sustainable development strategy and investments in community development-related projects have increased by 19% to reach QR520.52 million ($143 million) and they are now involving the society in its own development. Environmentally, flaring has decreased by 13% as did the amount of wastewater discharged into the sea. The government has also launched its Sustainable Development Ambassadorship Programme, an ideal platform for collaboration and cooperation, and appointed Dr Mohammed Yousef Al Mulla, Vice Chairman and Chief Executive Officer of Qatar Petrochemical Company (QAPCO), as its first Ambassador to promote the implementation of best practices across the sector. UNWAVERING COMMITMENT The government’s commitment to fulfill the requirements of sustainable development as part of the Qatar National Vision 2030 goals has made the companies engaged in the two sectors lay firm emphasis on performance improvements, long-term strategy and target-setting, implementation of policies, and stronger international engagement. “The unwavering commitment of these companies has propelled their components to constantly develop ways

of balancing economic growth with human development, environmental protection, and social advancement,” Minister for Energy and Industry HE Dr Mohammed bin Saleh Al Sada said while releasing the fourth Sustainable Development Industry Reporting (SDIR) 2013 findings in June this year. He further said: “I have no doubt that such sustainable performance by the energy and industrial sectors has positioned Qatar as a responsible global energy provider with a world-class practice.” The Minister also wanted to the companies to focus

I have no doubt that such sustainable performance by the energy and industrial sectors has positioned Qatar as a responsible global energy provider with a world–class practice.” HE DR MOHAMMED BIN SALEH AL SADA Minister for Energy and Industry

PROGRESS 2014-2015 CSR & ENVIRONMENT

The government is monitoring waste management sector and the country is on the right track as far as the goals set by the National Development Strategy (2011-16) and Qatar National Vision 2030 are concerned.” SHEIKH FALEH NASSER J AL THANI Chief Engineer and Undersecretary Assistant General Service affairs wing Qatar Statistical Authority

THE FACTS

CORPORATE SOCIAL RESPONSIBILITY IN QATAR Top CSR - focus area critical for sustainable development

COMPANIES

78%

% 86 Qatar organisations are actively

Education

66%

engaged CSR

CEO’S INVOLVEMENT IN CSR

Employment

42% Youth

69%

Involved

31%

Not involved

source: Informa MEA

their attention on new targets and higher achievements. “The participating companies should complete their fiveyear sustainable development strategies with well-defined performance targets. It is time that sustainability becomes a dedicated process by all companies and across the entire energy and industry spectrum,” he added. ACHIEVEMENTS In terms of energy and climate change achievements during

2013, there has been a 3% reduction in natural gas consumed per tonne of production, 2.4% reduction in natural gas usage, 10% reduction in per capita electricity consumption in Qatar and 13% reduction in flaring, according to the SDIR findings. As far as environment is concerned, there has been a reduction of 9% of NOX emissions and as much as 24.5 million cubic meters of waste water was recycled in 2013. Besides, 36% of the waste has been recycled, which is 2% less than the prescribed target of 38% to be achieved by 2016, and, 2.2% reduction in the use of fresh water. Speaking to Progress Qatar on the sidelines of a conference on waste management held in September, Chief Engineer and Undersecretary Assistant in General Service affairs wing of QSA, Sheikh Faleh Nasser J Al Thani, said that the government has been monitoring recycling of waste and the country is on the right track as far as the goals set by the National Development Strategy (2011-16) and Qatar National Vision 2030 were concerned. As far as economic performance in 2013 was concerned, Qatar remained the largest exporter of Liquified Natural Gas (LNG) and Helium in the world; revenues from the energy sector stood at QR556.92 billion ($153 billion); and 1,174 jobs were created. In the area of health and safety, the sector completed more than 356 million work hours in which there were a total of 529 recordable personal safety incidents, a 22% reduction from 2012. The most significant gains were made in contractor safety, which may reflect the more extensive levels of engagement in recent years, as captured by the range of case studies within the report’s workforce engagement section. Occupational illness performance improved. However, there was an increase in the number of heat stress incidents. From a process safety perspective, the number of loss of containment incidents decreased. ROLE OF CORPORATE SECTOR With companies shifting their focus to sustainable development as part of their corporate social responsibility, there is renewed enthusiasm in the Middle East and North Africa region as the decision is expected to create more jobs. The MENA region, with GDP said to be around QR25.48 trillion representing 7% of the global economy and whose population is around 500 million, 30% of them aged between 15 and 29, offers huge scope for sustainable development. According to a report entitled “Towards the Circular Economy,” which was presented at the 2014 World Economic Forum in Davos, the concept of circular economy, which can convert scant material resources into surplus ones, could generate QR3.64 trillion ($1 trillion) per year and create 100,000 jobs for the global economy by 2025

QATAR AND THE WORLD

“OUR FOREIGN POLICY IS BASED ON UNSHAKABLE PRINCIPLES TO PROMOTE THE ESTABLISHMENT OF PEACE, SECURITY AND STABILITY, RESPECT FOR HUMAN RIGHTS AND SUPPORT OF PEOPLES BY WORKING WITH REGIONAL AND INTERNATIONAL SYSTEMS.”

HE DR KHALID BIN MOHAMED AL ATTIYAH MINISTER OF FOREIGN AFFAIRS

PROGRESS 2014-2015 QATAR AND THE WORLD

QATAR-IRAN TIES GET A BOOST

UNREST IN THE WIDER MIDDLE EAST REGION, FALLING OIL PRICES AND THE THAWING OF FROZEN RELATIONS BETWEEN IRAN AND THE WORLD POWERS ARE AMONG THE REASONS THAT HAVE BROUGHT BOTH QATAR AND IRAN MUCH CLOSER THAN IN THE PAST IN THE LAST FEW MONTHS.

esides sharing concern over the growing militancy in the region, the two countries have resolved to strengthen trade ties. Iran is keen to cement its relations with Qatar and other GCC countries due to vulnerability to the fluctuating oil prices in the global markets. This development did not go down well with some of the neighbouring countries but fast-changing geopolitical equations made them realise that Qatarâ&#x20AC;&#x2122;s approach to regional affairs has not only been multi-dimensional but also balanced. While Saudi Arabia sees Iran as an arch rival in its efforts to maintain supremacy in the Gulf, Bahrain is displeased that the ongoing unrest in its territories has the alleged tacit support of Iran. Along with these two, the UAE is against Qatar supporting the outlawed Islamist group - Muslim Brotherhood

- in Egypt, resulting in strained relationships between these nations and Qatar. The three countries even withdrew their ambassadors from Qatar in March this year. However, the Muslim Brotherhood leaders, who were staying in Doha for more than a year, left the country so as not to cause further rift among the GCC nations. This has helped in resolving the chasm among the GCC states and the UAE, Bahrain and Saudi Arabia ambassadors returned to Qatar in November. Iranâ&#x20AC;&#x2122;s relations with Qatar have been relatively comfortable compared with other GCC countries. In the past, unlike other GCC states, Qatar neither supported Iraq in the war with Iran in 1980s nor favoured the UN Security Council resolution to impose sanctions against Iran in 2006 for its nuclear enrichment programme. Though both countries differed over the Syrian crisis (Iran supports the present Syrian Government led by its president

PROGRESS 2014-2015 QATAR AND THE WORLD

Qatar’s Foreign Minister Khalid Al Attiyah (L) holds a joint press conference with his Iranian counterpart Mohammad Javad Zarif on February 26, 2014 in Tehran. AFP PHOTO/ATTA KENARE Bashar Al Assad while Qatar has been demanding action against the regime), they have a common cause in the fight against Islamic State (IS) militants, who want to overthrow the Tehran-backed Shiite government in Baghdad. Hassan Rouhani, who was elected as President of Iran last year, is viewed as a moderate and he is firm in improving relations with the GCC countries. As part of confidence-building measures, Rouhani deputed his senior Cabinet colleagues to the region early this year and the GCC nations too responded positively. As far as bilateral trade is concerned, both countries are keen to expand relations by having a joint investment corporation, signed agreements to establish joint free trade zones and also a direct shipping line between the two countries as the ports in both countries are less than three hours apart. They are also keen to remove all barriers which limit bilateral trade and economic cooperation.

During one of the meetings, Qatar’s Minister of Economy and Commerce HE Sheikh Jassim bin Jaber Al Thani said: “Lack of a shipping line between Iran and Qatar is a logistical barrier that has prevented us from expanding our goods exchange. We have asked for a shipping line to be set up and Iran has backed the proposal.” Iran’s plans to support Qatar have many reasons as the 2022 World Cup-related infrastructure projects worth billions of dollars are taking place at Qatar at a rapid place. Akbar Torkan, Secretary of Iran’s Supreme Council of Free Trade Zones, said that there was huge potential in such collaboration particularly at a time when Qatar is preparing to host the soccer event. “This is important and a rare chance for Iran to transform her biggest gas partner to her biggest trade partner,” Torkan told an Iranian weekly in July this year

Iran’s relations with Qatar have been relatively comfortable compared with other GCC countries. In the past, unlike other GCC states, Qatar neither supported Iraq in the war with Iran in 1980s nor favoured the UN Security Council resolution to impose sanctions against Iran in 2006 for its nuclear enrichment programme.”

PROGRESS 2014-2015 QATAR AND THE WORLD

CHARITY BEGINS AT HOME

WHAT YOU GET FROM THE ALMIGHTY, SHARE IT WITH OTHERS WHO ARE LESS FORTUNATE THAN YOURSELF.

his is how Qatar Charity, a non-governmental organisation, has been working relentlessly for more than two decades. Its aim was to contribute to development efforts and disaster response for at-risk individuals and communities within and outside Qatar. Making its debut in the world of charity from a small office in 1992, Qatar Charity now has field offices in 18 countries and also works in 60 countries including conflict zones through its partners offering succor to people ravaged by disasters both, natural and man-made, and serves those in need regardless of their race, religion, colour, gender or nationality at home or abroad. Qatar Charity’s vision and mission is simple. While the vision is to be a leading Islamic institution that combines originality, creativity and professionalism in the field of development and humanitarian assistance whilst serving as a model for others, its mission is to strengthen the capacities of the neediest and most vulnerable groups to protect their

human dignity and achieve social justice in cooperation with its partners. Keeping this in mind, Qatar Charity works together with all parties concerned in its areas of interest and according to principles of mutual trust, transparency, participation and respect. It also deals with beneficiary groups and individuals in absolute neutrality and impartiality both in actions and attitudes. It does not involve itself in favour of any party at the expense of another in any conflict or situation. “We provide our services with the only consideration of humanity where any beneficiary is handled as a human being and their basic needs must be met in order to preserve their respective dignities,” said Qatar Charity’s Chief Executive Officer Yusuf bin Ahmed Al Kuwari. Though the organisation’s functioning is overseen by a Board of Directors elected by the General Assembly, its work is regulated by the government of Qatar. Qatar Charity’s works are derived from Islam and are consistent with all international and humanitarian fundamental standards.

PROGRESS 2014-2015 QATAR AND THE WORLD

VALUE SYSTEM A value system governs the way Qatar Charity works when providing services, regulate relationships and actions with its partners and stakeholders to contribute to the achievement of the organisation’s mission to realise its vision. “These values are derived from the values and principles of Islam and are compatible with all humanitarian and international standards,” said Al Kuwari. Qatar Charity also sees cooperation as one of its most essential values due to its conviction that it is the only way for rapprochement between peoples, conflict resolution and addressing the challenges facing the communities served. Though the government regulates the Charity’s work, Al Kuwari says that it is not under the influence of any other party in seeking to achieve its stated humanitarian objectives. “However, we are always ready to cooperate with any other party that respects its mission, vision and values whilst working together to achieve its goals,” he said. NEUTRALITY Making it clear that his organisation maintains neutrality in dealing with groups and individuals while providing services, Al Kuwari says that they never interfere with any party in the event of a dispute between them. The fact that it works in more than 60 countries is a testimony bear Qatar Charity’s stance. “We do not allow any racial, ethnic, religious, gender or other discrimination while providing services to beneficiaries,” he said. As far as professionalism is concerned, Qatar Charity adheres to globally-accepted humanitarian work standards. It constantly strives to develop the capacities of staff and volunteers to meet professional standards in its areas of intervention. “As a signatory to the Code of Conduct of the International Red Cross and Red Crescent Movement and NGOs in disaster relief, we maintain the highest standards,” he said. Besides being a member of the Cairo-based General

We provide our services with the only consideration of humanity where any beneficiary is handled as a human being and their basic needs must be met in order to preserve their respective dignities.” YUSUF BIN AHMED AL KUWARI Chief Executive Officer Qatar Charity

Founding Conference of the Arab Network for NGOs, Qatar Charity has also maintained its consultative status with the United Nations Economic and Social Council since 1997 and was amongst the initial agencies conferred consultative status with the Organisation of Islamic Cooperation in 2013. APOLITICAL NGO Qatar Charity’s activities are purely non-political and are not aligned with any movements, groups or affiliations. As is the case with all Qatari organisations, all partnerships and funding from Qatar Charity are carefully reviewed by the government. The Ministry of Social Affairs applies a rigorous process of approving the registration of overseas partners while the

RECENT QC RELIEF RESPONSE HISTORY YEAR

TOTAL EXPENDITURE (in Qatari Riyals)

TOTAL EXPENDITURE (in US Dollars)

TOTAL BENEFICIARIES

2008

9,155,495

2,508,355

105,755

2009

62,216,808

17,045,701

58,601

2010

74,932,197

20,529,369

570,317

2011

41,206,260

11,289,386

482,439

2012

70,337,846

19,270,494

668,076

(through October)

176,708,367

48,413,251

11,483,662

TOTAL

QAR 488,133,476

USD 133,735,199

13,811,507

2014

SECTORS OF INTERVENTIONS Water and Sanitation Food Aid Transitional Shelter Permanent Shelter Health Service Psychological Support Emergency Education

2014 AREAS OF INTERVENTION Bangladesh, Burkina Faso, India, Iraq, Jordan, Lebanon, Mali, Mauritania, Myanmar, Niger, Pakistan, Palestine, Phillippines, Sudan, Syria, Turkey and Yemen

PROGRESS 2014-2015 QATAR AND THE WORLD

Qatar Charity Chairman HE Hamad bin Nasser bin Jassim Al Thani with Prince Charles in London.

CURRENT QATAR CHARITY SPONSORSHIPS SPONSORED

NUMBER

Orphans

66,398

88.15%

Households

3,895

5.17%

Teachers

2,082

2.76%

Students

1,763

2.34%

Persons with Special Needs

1,184

1.57%

75,322

100%

Total

(as of November 11, 2014)

Ministry of Foreign Affairs reviews and provides approval prior to each and every financial disbursement from Qatar Charity. QCHARITY Unlike other organisations from the Gulf, Qatar Charity has an established history and proven track record as an implementing agency (and not solely as a donor) based on its on-the ground presence through Qatar Charity field offices which predate other agencies from the region. “This hands-on presence has added further value to Qatar Charity’s work as it has built stronger local trust by better understanding the communities served as well as gaining further acceptance and buy-in from the various communities for better Qatar Charity accessibility,” Al Kuwari said. Qatar Charity receives funds from various sources such as

member subscriptions, donations, gifts, endowments and wills, government/bilateral funding, institutional donor grants and contracts, development banks, private sector (within the framework of corporate social responsibility), Zakat and Sadaqah (individuals and companies) and return on QC investments. In 2013, the income from these sources amounted to QR578.76 million ($159 million) of which about QR100 million ($27.4 million) came from institutional funding sources. Qatar Charity also works in the fields of sustainable development, poverty alleviation, disaster preparedness and response with a specific focus on: family, women and child support, family economic self-help (distribution of animals, seeds and fertilisers, sewing machines, etc), protection, permanent shelter, orphans support, monthly stipends, health screening, educational kits, seasonal programmes, school construction/reconstruction, provision of missing school facilities, teacher training, construction and rehabilitation of mosques, construction of community complexes, provision of basic education and literacy, installation of tube wells, hand and electric pumps or other needed water facilities including water tanks and reservoirs, provision of electric water coolers, provision of toilets, hygiene promotion campaigns, purchase of seven water borehole drilling machines, construction of primary care and basic health units, provision of ambulances, provision of basic healthcare to those affected by emergencies and psycho-social rehabilitation, he added

PROGRESS 2014-2015 QATAR AND THE WORLD

Ever since I assumed my duties as the Ambassador of Japan to Qatar, I have taken a pledge to devote myself to fostering bilateral relationships in various fields. Owing in no small part to the support and cooperation I have received from the Qatari government and people, I have managed to keep that pledge without any significant difficulties.” HE SHINGO TSUDA Ambassador of Japan to Qatar

EVERLASTING FRIENDSHIP

THE RELATIONSHIP BETWEEN THE JAPANESE AMBASSADOR, HE SHINGO TSUDA, AND QATAR DATES BACK 27 YEARS. AMBASSADOR TSUDA CAME TO DOHA FOR THE FIRST TIME IN 1987 AND HAS WITNESSED HOW THE COUNTRY DEVELOPED INTO ITS PRESENT FORM IN TUNE WITH THE CHANGING TIMES.

n a conversation with Progress Qatar, Ambassador Tsuda talks about how the two countries can exchange expertise in various fields and the future of the bilateral relations for mutual benefits.

AMAZING GROWTH My first visit to Doha was in 1987 to develop the first LNG project in Qatar initiated by the international consortium including the Japanese company which I was working for. The landscape of Doha 27 years ago was very different from what it is now. Back then, there were almost no buildings except for the Sheraton Hotel in the West Bay. Now there are many sky scrapers that stand out as amazing indicators of growth. Qatar is in the middle of a tremendous growth, and under the leadership of The Emir, HH Sheikh Tamim bin Hamad Al Thani, it is expected to play an important role in every domain. As we have witnessed earlier, Qatar has already taken great strides in the international arena where its role is expected to become even more significant over the course of time. Another impressive aspect of Qatar is its ability to maintain

equilibrium as an oil-based and knowledge-based economy in a way that helps to diversify the country’s economy and to guarantee a stable and sustainable business environment. In this sense, Qatar and Japan will work constantly and relentlessly in the future to strengthen the ties and diversify the domains of their bilateral cooperation beyond the excellent existing relations founded on the energy and trade fields. We also sincerely appreciate the Qatar Friendship Fund supporting Japan’s reconstruction efforts. A RELATION OF FRIENDSHIP Qatar and Japan have been enjoying excellent relations for over 40 years now and that is strengthened in many ways under mutual trust and respect. As the Ambassador of Japan in Qatar, I have been working on further deepening the bilateral relations while creating new paths allowing our relations based on friendship and partnership to grow more than ever. Ever since I assumed my duties as the Ambassador of Japan to Qatar, I have taken a pledge to devote myself to

PROGRESS 2014-2015 QATAR AND THE WORLD

TRADING TIES Japan has been the biggest trading partner of Qatar where the total volume of trade between the two countries reached QR138.32 billion ($38 billion) (imports to Japan; LNG, oil, exports from Japan; automobiles, electric equipment) in 2013. Moreover, Qatar has been a major supplier of energy to Japan, and it is our second largest LNG supplier, with a share of 18% and total imports of about 16 million tons out of Qatar’s 77 million ton production of LNG in 2013. The number of Japanese companies in Doha increased recently to over 40, and this number is expected to rise with the rapid economic development of Qatar in all fields, including the infrastructure sector, towards the 2022 FIFA World Cup. I am reassured that the upward trend of the number of Japanese companies getting positively involved in the Qatari economy will continue in the future.

HH Sheikha Moza bint Nasser with Japanese Prime Minister Shinzo Abe at the latter’s residence during her visit to Japan in April. AFP PHOTO / FRANCK ROBICHON / POOL fostering bilateral relationships in various fields. Owing in no small part to the support and cooperation I have received from the Qatari government and people, I have managed to keep that pledge without any significant difficulties. JAPAN AND QATAR’S LNG SECTOR Japanese companies got engaged in the field of automobile in the 1960s and the oil and steel sectors in the 1970s. In the 1980s, Japan launched the development of the first LNG (liquefied natural gas) project in Qatar even though the future of the LNG industry was still uncertain at that time. In the process of development, the Japanese power company Chubu Electric made a long-term LNG sales and purchase contract, and both the public and private sectors of Japan participated in the project by financing, investing, building the plants and shipping the products. Thus, Japan was one of the pioneers in the development of the LNG industries that has strengthened the ties between the two nations and resulted in maintaining excellent bilateral relations founded on mutual respect and trust. The relationship between Japan and Qatar has steadily progressed through firm economic ties. Consequent to the support extended to develop an LNG project in Qatar by the Japanese government and the private sector in the 90s, the production of LNG became the basis of Qatar’s development. Late in 2010, Qatar achieved the annual LNG production capacity of 77 million tons.

COOPERATION Upon the visit of Japanese Prime Minister Shinzo Abe to Qatar in August 2013, a joint statement on strengthening the partnership towards stability and prosperity between the two countries was declared, with an emphasis on strengthening the bilateral relations by upgrading the level of cooperation in various fields. Furthermore, Her Highness Sheikha Moza bint Nasser’s visit to Japan in April 2014 also paved the way to diversifying our bilateral relationship beyond the economic and energy fields by discussing future ties with leading Japanese institutes and laying the foundation for further academic and scientific cooperation. Qatar is blessed with a large wealth of energy. However, there is a crystal clear message from the Qatari leadership to the citizens to fulfill Qatar National Vision 2030 by attaching prominence to education and development of human resources which are inexhaustible compared to the limited energy resources. In pursuit of this goal, many Qatari technical and administrative staff have been invited to Japan under several Japanese companies’ training programmes to serve the purpose of generating a very effective framework to foster a qualified young generation and to help Qatar develop its own industries capable of taking charge of the future. There is another great chance as well for closer cooperation between the two countries during the preparatory stages for two international events: the Tokyo Olympics to be hosted in 2020 and the FIFA World Cup to be hosted in Qatar in 2022. I hope that those two historic events will be another motivating factor to bring both nations to closely cooperate and to exchange knowledge and expertise in order to ensure their success as the host countries

PROGRESS 2014-2015 QATAR AND THE WORLD

We are interested in identifying fields of cooperation between Germany and Qatar which are sustainable and the German Embassy is, of course, eager to support wherever it can. We aim at connecting our society in all fields and will not focus on business relations only.” HE ANGELIKA STORZ-CHAKARJI German Ambassador

PARTNERS IN PROGRESS

QATAR AND GERMANY HAVE BEEN WORKING TOGETHER EVER SINCE BOTH COUNTRIES ESTABLISHED THEIR DIPLOMATIC RELATIONS FOUR DECADES AGO. GERMANY’S AMBASSADOR TO QATAR HE ANGELIKA STORZ-CHAKARJI TELLS PROGRESS QATAR ABOUT THE RECENT VISIT OF THE EMIR, HH SHEIKH TAMIM BIN HAMAD AL THANI, TO GERMANY AND THE MUTUAL COOPERATION BETWEEN BOTH COUNTRIES IN VARIOUS AREAS, AMONG OTHERS.

he German-Qatari relations have been growing steadily in the last 41 years, since the establishment of bilateral diplomatic relations between the two countries and they cover a wide range of commercial, cultural, scientific and political exchanges. Germany has always been an attractive destination for Qatari tourists for both leisure and medical tourism. A considerable number of German companies are already active in Qatar and Qatari investments in Germany are constantly growing. An increasing number of German expats have found attractive positions in Qatar and are actively contributing to Qatar´s development with regard to business relations as well as social community life. The growing attractiveness of the German language is another proof of the close ties between the two countries. The number of international students enrolled in the German International School in Doha is growing. I am particularly happy about the success of the German

language training centre in Doha - a partner of the GoetheInstitut - which teaches German as a foreign language at all levels, as well as about the first Qatari independent school which has introduced German as a foreign language to its curriculum in the previous academic year. Cooperation in the field of cultural relations is given equal importance. Both countries are currently preparing for the upcoming German-Qatar Cultural Year 2017, which will showcase a number of top events in Doha and Berlin. We are interested in identifying fields of cooperation between Germany and Qatar which are sustainable and the German Embassy is, of course, eager to support wherever it can. We aim at connecting our society in all fields and will not focus on business relations only. SHEIKH TAMIM’S VISIT It was the first official visit of The Emir, HH Sheikh Tamim bin Hamad Al Thani, and his high-level delegation to Germany. Undoubtedly, it was a visit of utmost importance. His Highness met with German Chancellor Angela

PROGRESS 2014-2015 QATAR AND THE WORLD

AFP Photo/John MacDougall

new challenges. Let me mention a few examples: The first tunnel boring machines (TBMs) from a German company were recently delivered to Doha to be used in the Doha Metro rail projects. Another German company specialised in foundation engineering was involved in the foundation works of Msheireb Downtown Project and the New Doha Port. The prestigious town construction project Lusail City was awarded to a German company in April 2012. German companies are well positioned to offer expertise in building infrastructure.

The Emir, HH Sheikh Tamim bin Hamad Al Thani, with German Chancellor Angela Merkel during his visit to Germany on September 17, 2014. Merkel, German President Joachim Gauck, Foreign Minister Frank-Walter Steinmeier and Minister of Economy and Vice Chancellor Sigmar Gabriel. In their discussions, the wide range of bilateral relations from social and economic to political and cultural affairs was covered in depth. His Highness Sheikh Tamim not only visited the federal capital Berlin in Munich, he also spent a day in the capital of the state of Bavaria. I believe that such visits are important because they create personal ties between the top-level leadership in our countries which, in turn, create trust and understanding on common issues. Qatar is a significant partner for Germany in the GCC region. BILATERAL TRADE Trade figures for the last couple of years show that there has been a steady and strong growth in economic activities between the two countries. Qatar is the most important Arab investor in Germany. Qatar-German bilateral trade volume increased to QR9.29 billion in 2013. Currently, around 140 German companies from a wide range of business sectors are present with branches or offices in Qatar. A large number of those companies are active in the construction business - as project managers, leader or partner in a consortium, as subcontractor or as a reliable partner delivering goods or services from Germany. There are quite a number of companies who have successfully finished projects in Qatar and are about to tackle

100

WIDER COOPERATION I believe that both research and a highly skilled workforce are the key factors to ensure a sustainable success in whatever area you might think of. Qatar has made remarkable efforts to develop high-quality research institutions. This could be an area of further cooperation as the German academic system hosts prestigious scientific bodies, such as the German National Academy of Science and Engineering ‘acatec,’ a federal, state-funded national academy and the body and voice of science and engineering in Germany and abroad. When it comes to the training of employees and special work skills, Germany has a lot to offer. The German model of dual professional training and apprenticeship is known worldwide for its outstanding professionalism and success. The Embassy would be more than happy to facilitate programmes in that regard and to help establishing contacts to relevant German institutions and authorities. GERMAN SMES Let me also mention the success story of German small and medium enterprises (SMEs). Germany´s mostly family-owned SMEs are the backbone of the German economy. Until today, they generate most of our GDP growth and by far employ the majority of our workforce. The structure of family-owned enterprises is familiar to Qataris. Such German companies are eager to share their experiences with their Qatari partners. The German Chamber of Industry and Commerce (AHK) has been regularly organising workshops for SMEs in Doha. In spring 2015, the AHK will organise an SME conference in Doha. Leading German companies of different sectors are invited to Doha to present “best practices” and their company structures. This event is supported by the German and Qatari Ministries of Economy. To sum it up, we are very pleased with the current cooperation between the Chamber of Commerce and the respective Ministries and we are looking forward to further strengthening our ties in the future

SOCIAL DEVELOPMENT

“WE WILL ALWAYS WORK TO ACHIEVE HH THE EMIR’S VISION FOR A PROGRESSIVE STATE IN WHICH ALL CITIZENS ARE ENJOYING THE BEST SERVICES AND PARTICIPATING STRONGLY IN ESTABLISHING ITS DEVELOPMENT TO BE AT THE FOREFRONT PLACE AMONG THE DEVELOPED COUNTRIES.”

HE ABDULLAH BIN KHALID AL QAHTANI MINISTER OF PUBLIC HEALTH

PROGRESS 2014-2015 SOCIAL DEVELOPMENT

EDUCATION HOLDS THE KEY QUALITY EDUCATION IS THE FUNDAMENTAL PILLAR OF HUMAN DEVELOPMENT AND AN ESSENTIAL INGREDIENT TO SUSTAIN QATAR’S LEGACY AND ITS WEALTH. THAT’S WHY EDUCATION HAS BEEN RECOGNISED AS ONE OF THE CORE PILLARS OF THE NATIONAL DEVELOPMENT STRATEGY.

atar’s integrated strategy to build a comprehensive and effective education system includes a five-point agenda: to strengthen primary and secondary school education, align education to labour force needs, improve higher education programmes, strengthen technical and vocational programmes

We will exert efforts to set up a national centre for developing educational leaders and teachers and to apply a new system to evaluate performance of principals and teachers.” HE DR MOHAMMED ABDUL WAHED AL HAMMADI Minister of Education and Higher Education

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and enhance scientific research. The primary focus now is on building the infrastructure to accommodate the burgeoning population and enhancing quality of education at various levels. SCHOOL INFRASTRUCTURE The mad scramble for school admissions in sought after institutes clearly suggests a dearth of quality educational institutes currently in Qatar. The burgeoning and diverse population requires not just more schools but a diversified curriculum as well. Reports suggest the lack of good schools was one of the concerns for attracting a skilled workforce. To ease the strain on the education system, the Supreme Education Council (SEC) gave permission to open 15 new schools in 2014. Of them, six are independent schools, four Indian, two each British and American, and one Finnish. According to media reports, 22 new schools are expected to be opened by May 2015 in addition to nine kindergartens. The 28 new private schools set to open by 2015 would be able to accommodate some 10,000 students. The budget for 2014-15 has allocated QR26.3 billion for education, an increase by 7.35% compared with the previous year. Part of the funds will be used to build 85 new schools to be completed within a year and a half. This is in addition to 44 schools currently being built by Ashghal. Allocations were also made to Qatar Foundation for Education, Science and Community Development and Qatar University for expansion of their facilities. In the higher education segment, the SEC approved new undergraduate programmes with Qatar University and Hamad bin Khalifa Al Thani University. It signed agreements

PROGRESS 2014-2015 SOCIAL DEVELOPMENT

with four French universities to provide language courses and ensure that students get enrolled in French universities. In addition, the SEC is cooperating and coordinating with the Embassy of Japan to obtain scholarships for Qatari students. Licences for several higher educational institutes such as the Police Institute, Joaan bin Jassim Joint Command and Staff College, Emir Air Force’s Air College, Ras Laffan Emergency and Safety College, Qatar Aeronautics College to help it grant degrees in aviation, and Dutch Stenden University were granted. PRIVATE SECTOR IN EDUCATION To attract the private sector to invest in education, Qatar Development Bank and the SEC plan to offer a 15-year education loan to those interested in setting up pre-primary, primary and secondary education institutes. According to a report entitled “GCC Education Industry 2014” released by Alpen Capital, the loan, made available at a subsidised interest rate of 3-4% per year, will allow investors to finance up to 70% of their overall project cost. The SEC will conduct the feasibility study for the education projects. NEW MEDICAL COLLEGE TO OPEN Qatar will get a new medical college next year and expects to enrol 50 students in its first academic year 2015-16. The college is scheduled to open in September 2015 and will offer a six-year programme leading to a degree in Doctor of Medicine (MD). General courses such as biomedical sciences and chemistry will be offered in a gender-segregated environment while specialised courses and clinical teaching will be offered jointly. It will be the second medical college in Qatar after Cornell University opened its foreign branch in Qatar. Weill Cornell Medical College in Qatar (WCMC-Q) also offers a sixyear programme that offers a Cornell University Doctor of Medicine degree, the same qualification awarded to Cornell students in the United States. This is another milestone in the higher education sector and will help fill the skills gap in the expanding healthcare sector.

QATAR RANKING

QUALITY OF EDUCATION Parameter

Rank

Quality of primary education

Quality of the educational system

Quality of Math and Science education

Quality of management schools

Internet access in schools

Availability of research and training

Extent of staff training

INNOVATION AND RESEARCH Parameter

Rank

Capacity for innovation

Quality of scientific research institutes

Company spending on R&D

University-industry collaboration in R&D

Government procurement of advanced technology products

Availability of scientists and engineers

Patents and applications per million population

DEVELOPMENTS AT SEC The SEC, the authority responsible for developing the country’s education system, has a huge task ahead. The SEC conducts a regular annual survey of the education system to identify issues. The findings of the survey are incorporated to improve the system. The survey will now be extended to nurseries and community schools too. To ensure the quality of staff and training provided, the SEC is in the process of developing new guidelines for granting professional licence to teachers and establishing a national

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PROGRESS 2014-2015 SOCIAL DEVELOPMENT

80%

parents are satisfied with the quality of education provided to their children

45%

35%

Other Arabs

20%

Qataris

students who have learning difficulties or specific kind of disabilities

parents are satisfaction about how schools deal with their children

parents are satisfied with the quality of the curriculum

The percentage of students’ nationalities

82%

75%

non-Arab

The average number of teaching hours per week

11.4

The average years of teaching experience for teachers

Hrs International schools

16.5

Hrs Private Arabic Schools

Hrs The average time spent by teachers in professional development during the year

13.6

Hrs Independent Schools

Source: Evaluation Institute annual report on education in Qatar schools for 2012-13

body for academic accreditation and quality assurance of Qatar’s higher education institutions and programmes. The focus on vocational courses continues with a new speech and sign language trainer diploma to be introduced in partnership with Qatar University. Partnerships were also signed with Qatar Petroleum, Qatar General Electricity & Water Corporation (Kahramaa), Hamad Medical Corporation and Qatar National Library for various programmes. Speaking about the improvements made in the education system, HE Dr Mohammed Abdul Wahed Al Hammadi, the Minister of Education and Higher Education and the Secretary General of the SEC, said: “We will exert efforts to set up a national centre for developing educational leaders and teachers and to apply a new system to evaluate performance of principals and teachers.” Condemning absenteeism in schools, the Minister also said, “Last year we issued a student conduct code and code of professional conduct for teachers to give professional educators powers to deal firmly with disciplinary infractions.” E-LEARNING The SEC gave away 22,000 tablets, each costing QR 4000 5000, to 40 independent schools as part of the Electronic

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Schoolbag project, according to a report in a local daily. As part of the e-learning initiative, textbooks and school bags will be replaced with an electronic device for all independent school students. The move is expected to improve technical skills of students and provide access to technology at all times. STUDENTS SHINE Qatari students participated in several international competitions providing them exposure and a platform to showcase their abilities. Notably, 15 students from different independent schools participated in the 5th Intel Science Competition-Arab World 2014 held in the US.This annual competition in science, technology, engineering, mathematics and other fields provides an opportunity for talented students to display their research projects in the international arena, where a number of international judges would evaluate the competing projects. Seventy one students from seven schools participated in the 2014 World Robot Olympiad “Robots and Space” held in Russia in November 2014. In 2015, Qatar will host the event with 50 countries participating. More than 1,350 students gathered to set a new Guinness World Records title for the “Largest Reading Lesson,” in Arabic

PROGRESS 2014-2015 SOCIAL DEVELOPMENT

CNA-Q PARTNERS WITH LOCAL INDUSTRY COLLEGE OF THE NORTH ATLANTIC – QATAR HAS LONG PARTNERED WITH LOCAL INDUSTRY TO ENSURE RELEVANCY IN THE PROGRAMMES AND TECHNOLOGY OFFERED ACROSS ITS FOUR SCHOOLS: BUSINESS STUDIES, ENGINEERING TECHNOLOGY, HEALTH SCIENCES AND INFORMATION TECHNOLOGY. IN 2014, ONE SUCH PARTNERSHIP, WITH QATAR PETROCHEMICAL COMPANY (QAPCO), HAS THE POTENTIAL TO CHANGE THE TECHNICAL AND VOCATIONAL EDUCATION LANDSCAPE IN QATAR.

he announcement of the QAPCO Professional Chair in Vocational Studies marks the first time in the Middle East, and only the second time globally, that a full-time Chair position has been created to study vocational education and its relevance in, and impact on, the workforce. The importance of technical and vocational education and training (TVET) to Qatar and its industries has been recognised and a strategy put forth in the Qatar National Vision 2030 to increase the effectiveness of TVET within the country. The creation of the Professional Chair in Vocational Studies at CNA-Q is an important element in future State TVET planning. Described by Dr Mohammed Yousef Al Mulla, CEO and Vice Chairman of QAPCO, as “one of the most important educational research initiatives to be implemented in Qatar,” the Chair in Vocational Studies will review, design and implement strategies that will improve the overall quality of future graduates, equipping them with the specific competencies required in industry. EXTENSIVE RESEARCH In addition to ensuring graduates are ready for the workforce, the Chair will also conduct extensive research in local and regional labour market policies, on-the-job-training, transitioning from the classroom to the workforce and the vocational training needs of Qatar’s oil and gas Industry. The importance of technical education to the State and all its industries was emphasised in

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QAPCO Vice Chairman and CEO Dr Mohammed Yousef Al Mulla and CNA-Q President Dr Ken MacLeod 2014 with the introduction of new Joint Oversight Board members. HE Dr Mohammed bin Saleh Al Sada, the Minister of Energy and Industry, was appointed Chair of the Board, with Dr Al Mulla appointed as Vice–Chair. Dr Khalid Mohammed Al Horr, Director of the Higher Education Institute, Supreme Education Council, and Dr Abdullatif Al Khal, Director of Medication Education for Hamad Medical Corporation, also joined the Board which includes four members from Newfoundland and Labrador, Canada. Since 2002, CNA-Q has been leading the region in providing advanced technical education. Hands-on, experiential learning in purpose-built

classrooms and laboratories ensures students are job-ready upon graduation. Enriching this experience is the annual Skills Competition, with students from all disciplines participating in real-life scenarios, from designing a website to working on an inter-disciplinary healthcare team. In 2014, the event welcomed Health Sciences competitors from local schools including Qatar University, Weill-Cornell University and the University of Calgary. With more than 3000 graduates working or continuing their education both locally and internationally, CNA-Q continues to meet its mandate to provide the best technical education to students from across the country

PROGRESS 2014-2015 SOCIAL DEVELOPMENT

HEALTH IS WEALTH

IN LESS THAN A DECADE FROM NOW, QATAR IS PLANNING TO OFFER FULLFLEDGED HEALTHCARE SERVICES TO ITS RESIDENTS. A MULTI-PRONGED APPROACH INCLUDING SYSTEMIC AND REGULATORY CHANGES, CAPACITY CREATION AND NEW INFRASTRUCTURE IS NEEDED TO MEET THE VISION. THE SYSTEM IS CURRENTLY UNDERGOING A MASSIVE OVERHAUL GUIDED BY THE NATIONAL HEALTH STRATEGY (NHS) THAT LAYS DOWN CLEAR GOALS, OBJECTIVES AND TIMELINES.

ccording to the latest update from the Supreme Health Council (SCH), Qatar’s healthcare sector is well on its way to achieving its goal. As of March 2014, 44% of the NHS outputs have been completed, making significant headway. Two out of the 39 NHS projects have been completed and 37 are currently at various stages of execution. Commenting on the progress made in the health sector, HE Abdulla bin Khalid Al Qahtani, Minister of Public Health and Secretary General of the SCH, said: “NHS programmes are

moving from strategies and initiativesinto delivery. Now that the foundations have been laid, the next 18 months will see an increase in the speed of delivery of tangible outputs that will have a direct impact on access and quality of care.” Highlighting significant achievements made, the Minister said: “The roll-out of the Social Health Insurance Scheme means all Qatari nationals, residents and visitors will have access to high-quality, affordable health care.” He also said that the first two phases have seen considerable enrollment in and utilisation of the scheme by Qatari nationals. The development of the Primary Health

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PROGRESS 2014-2015 SOCIAL DEVELOPMENT

2014-15 set aside QR15.7 billion, 12% higher than the previous year. A major portion of this will go towards building the necessary infrastructure – hospitals, health centres and specialty facilities – so that the number of people travelling abroad for treatment is brought down. Approximately 2,500 and 3,160 patients went overseas for medical treatment in 2011 and 2012 respectively, according to SCH. The ongoing expansion will enable Qatar to surpass bed densities in OECD countries like Sweden, New Zealand, the United Kingdom (UK) and Ireland that are known for their best practices - well ahead of the Qatar 2022 World Cup. Commenting on the progress made on expansion projects, HE Al Qahtani said: “We advanced on schedule the establishment of 65 new facilities, 42 renovation projects, and 3,481 additional hospitals beds.” The Trauma Mass Casualty Hospital (TMCH) and the Naufar hospital are some of the key projects being executed. The TMCH in Doha, to be designed and operated according to international best practice standards for trauma care, is expected to open in 2021. It will host an American College of Surgeons level 1 trauma centre of excellence, comprehensive surgical and medical specialties and sub-specialties, and will also support mass casualty and infectious disease outbreak scenarios. The Naufar hospital, expected to open in 2015, will treat and rehabilitate persons experiencing substance abuse and behavioural disorders. It will provide a 5-star setting including therapeutic garden spaces, social club, spa, fitness centre, swimming pool and restaurants.

The roll-out of the Social Health Insurance Scheme means all Qatari nationals, residents and visitors will have access to high-quality, affordable health care.” HE ABDULLA BIN KHALID AL QAHTANI Minister of Public Health

Care Corporation (PHCC), in line with the National Primary Health Care Strategy 2013-18, launched a year ago, was well advanced. “The establishment of the Qatar Council for Healthcare Practitioners is bringing more rigorous testing and licensing of clinicians, and the launch of the National Mental Health Strategy 2013-2018 has placed mental health on a par with physical health, where it belongs,” he said.

NEW HEALTHCARE FACILITIES Forty eight new healthcare facilities are planned in the next five years, according to the Qatar Healthcare Facilities Masterplan (QHFMP) released in 2014. The QHFMP is a roadmap to guide investments and ensure efficient allocation of resources in

INFRASTRUCTURE EXPANSION The health sector has been allocated humungous sums to proceed with the laid out goals. In one of the biggest allocations to the sector, the budget for the financial year

THE INFRASTRUCTURE EXPANSION ROADMAP 2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

MC Centres/units

Health Centres

Hospitals

Other Specialised

Support facilities

Total facilities

2208

2100

2223

2629

2980

3362

4462

5581

Total Hospital beds Total renovation projects

Source: Supreme Council of Health Annual report 2013

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PROGRESS 2014-2015 SOCIAL DEVELOPMENT

Health Insurance Company. To be executed in five phases, Seha covers in-patient and out-patient services and extends to preventative care, emergency treatment, physiotherapy, occupational therapy, speech therapy, long-term care, radiology, ophthalmology, laboratory testing, prescription medicines, dental and optical services. The second and third phases took off in 2014, bringing all Qataris under the cover, and the final phase will be rolled out this year.

Qatar Healthcare Facilities Masterplan (QHFMP) will ensure that infrastructure spending correlates directly to the needs of the population and the greater model of care.” DR FALEH MOHAMED HUSSAIN ALI Assistant Secretary General for Policy Affairs Supreme Council for Health

health facilities up to 2033. The facilities include 31 health centres – 14 to be developed during 2014-16 and the remaining 17 by 2020 – in eight diagnostic and treatment centres to be delivered by 2016, one general and one specialised hospital to come up by 2019, two long-term facilities and five hospital expansion projects by 2020. Launching the master plan, Dr Faleh Mohamed Hussain Ali, the Assistant Secretary General for Policy Affairs, SCH said: “QHFMP will ensure that infrastructure spending correlates directly to the needs of the population and the greater model of care.” HEALTH INSURANCE The phased rollout of health insurance that was launched in 2013 will ensure access to care people need. According to statistics released by the National Health Insurance Company (NHIC) - which operates and manages Seha - as of September 18, 2014, there have been over 400,000 doctor and hospital visits since the launch of the scheme in July 2013.The NHIC also announced the inclusion of physiotherapy clinics within Seha’s provider network. “The rate at which the use of Seha is growing is phenomenal. To have nearly 370,000 encounters with members in less than five months since Stage 2 was launched shows the extent to which the public has come to accept and rely upon Seha,” said Dr Faleh Mohamed Hussain Ali, acting CEO of the National

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PREVENTIVE HEALTH The age-old saying “Prevention is better than cure” is the basis for the holistic healthcare solution Qatar is aiming at to facilitate a move from curative to preventive care, Qatar has established a National Preventive Health Committee (NPHC) to improve and integrate preventive health delivery across the health sector. During 2014, the NPHC will devise a strategic direction and by 2015 hopes to develop and publish a National Prevention Strategy with a five-year execution agenda. Each and every aspect of healthcare has been dealt with separately through focused strategies that lay down specific goals and timeframes. This ensures regular monitoring and delivery. The National Mental Health Strategy, National Cancer Strategy and National Cancer Research Strategies have already been launched to address specific issues related to mental health, cancer treatment and research. DEVELOPING SKILLS SCH recognises “recruitment and retention of highly-skilled staff, both Qatari and expatriate” as a key challenge and acknowledges the shortage of high-quality human resources in the health system. The Qatar Council for Healthcare Practitioners was established to support the expansion of the health workforce. It aims at ensuring all healthcare professionals are adequately trained and supported to provide excellent care. Noting the role played by the council, the SCH 2013 annual report pointed out the number of applications for licences increased by 40%. The government also supports international scholarship programmes for Qatari students. Under the scholarship programme, 24 Qatari students were supported across a range of disciplines. THE YEAR AHEAD During 2015, the final phases of the health insurance scheme will be rolled out, extending the coverage to a larger population; 31 more outputs will be delivered under the NHS; construction of several new hospitals will begin; and, significantly, one can look forward to the National Prevention Strategy

PROGRESS 2014-2015 SOCIAL DEVELOPMENT

LABOUR REFORMS ON THE ANVIL

ASIAN WORKERS TOILING IN PUNISHING TEMPERATURES ONLY TO RETURN TO THEIR STUFFED AND FILTHY QUARTERS IS THE OFT-REPEATED STORY ABOUT WORKERS IN QATAR THAT ONE READS IN THE WESTERN MEDIA.

he international furore and continuous spotlight over migrant labour conditions has pushed the official machinery into action mode. At least the issue is now well recognised, documented, debated and a reasonable distance has been covered to address it. The ongoing preparation for the World Cup has ensured labour reform becomes a priority and is dealt with some sense of urgency. A slew of measures were announced to set things but the core systemic flaws were left hanging in ambiguity. Commenting on the progress made on labour law reforms, the Minister of Labour and Social Affairs, HE Dr Abdullah Saleh Mubarak Al Khulaifi, said: “Though consultations continue with business groups, workers groups and NGOs on the reforms that were announced in May, the direction that we are taking is firmly set and every effort is being made to put in place the reforms as quickly as possible, as these most recent measures show.” The minister also said that he welcomed the recent scrutiny “as it helps identify shortcomings and drive our wider progress.” International human rights organisations and the foreign media have been making allegations against Qatar about the ill-treatment of foreign workers for the last couple of years. The reports highlighted the shabby living and working conditions, poor pay, payment delays, passport confiscation, restriction on leaving the country and changing jobs, widespread abuse, restriction on forming trade unions to collectively fight for rights, lack of proper legal recourse and poor enforcement of existing laws as flaws that need urgent correction.

WORKER WELFARE CHARTER In response to these charges, Qatar Foundation (QF) first came out with its Mandatory Standards for Migrant Worker Welfare in April 2013, which are part of the migrant worker welfare initiatives. The document broadly covered issues ranging from recruitment principles to wages, working hours and conditions, medical insurance, holidays, transport and accommodation standards, and also laid down rules against passport confiscation. All contractors awarded QF construction projects were to comply with the terms of the charter to qualify for future contracts. QF, in a recent study on recruitment practices, also found that many migrant workers arrive in Qatar already

Though consultations continue with business groups, workers groups and NGOs on the reforms were announced in May, the direction that we are taking is firmly set and every effort is being made to put in place the reforms as quickly as possible, as these most recent measures show.” HE DR ABDULLAH SALEH MUBARAK AL KHULAIFI Minister of Labour and Social Affairs

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PROGRESS 2014-2015 SOCIAL SLUG DEVELOPMENT NAME

It is important for us to ensure contractors and their subcontractors do not require migrant workers (their employees) to pay recruiters anything for the jobs they are hired to do. These new standards will be accompanied by comprehensive administrative provisions for monitoring, policing and penalising violations.” MOHAMMED BAKHAMIS Director of Health, Safety & Environment Qatar Foundation

LABOUR WELFARE MEASURES INTRODUCED BY THE MINISTRY OF LABOUR AND SOCIAL REFORMS All wages to be electronically paid via bank transfers within seven days or face action. Electronic complaint system in English, Arabic, Urdu, Hindi, Tamil, Bengali and Nepali introduced for expatriate workers in Qatar Every worker gets at least a 4-6 sqm of living space and an onsite nurse should be available for every 100 workers. Strict implementation of summer work timings and a work ban were introduced between 11.30 a.m and 3 p.m. Number of safety inspectors increased from 200 to 243 Conducts regular field visits and inspection of labour accommodation. 4335 inspections were conducted in May and 5083 in June. Closed 33 sites for violations of labour laws.

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heavily in debt due to heavy fees charged by recruitment agencies in their home country. Commenting on labour welfare practices in QF, Mohammed Bakhamis, Director of Health, Safety & Environment at Qatar Foundation, said: “It is important for us to ensure contractors and their subcontractors do not require migrant workers (their employees) to pay recruiters anything for the jobs they are hired to do. These new standards will be accompanied by comprehensive administrative provisions for monitoring, policing and penalising violations.” The QF charter was followed by another set of standards released in February 2014 by the Supreme Committee for Delivery and Legacy - the authority responsible for the World Cup 2022 delivery. The standards focused on direct wage payment into bank accounts, defined standards for worker accommodation and laid out rules for welfare enforcement through regular audits and progress reports. Though it was a good beginning, it applied only to a small portion of workers in the country those employed on QF and World Cup projects - and does not address the larger worker community including domestic workers. According to the DLA Piper report commissioned by the Qatari government to review and recommend changes to the existing labour laws, Qatar has the highest ratio of migrants to citizens in the world with 1.39 million migrant workers who make up over 85% of the total population, leaving a large part uncovered by the charter. LABOUR ACCOMMODATION Several labour campuses with better facilities are being built across the country. These campuses adhere to standard norms set by the government. Property management and leasing companies will run two cities in the Industrial City and Barwa City, accommodating 150,000 workers. Private players such as the US-based real estate developer Global Building Solutions are also developing high-quality workers’

accommodation villages. “The private sector will develop and accommodate nearly 70,000 labourers,” notes Al Asmakh Real Estate Development. PROMISED REFORMS Based on the recommendations made by DLA Piper, Qatar promised to reform labour laws that cover the entire migrant population and proposed few changes to the law but set no time limits for execution. The proposals have to be approved by the Shura Council and Qatar Chamber before they become a law, which is expected to be enacted in 2015. The following are some of the key aspects addressed: Leaving Qatar: At present, employers should give employees an exit permit to leave the country. Under the new system, those who want to leave will have to apply at least three days prior to departure. The Interior Ministry will grant an automated exit permit if not contested by the employer. Emergency case, will be dealt with separately. Effectively, this still does not allow employees to leave the country at will. It only transfers the power to allow a worker to leave from the employer to the Interior Ministry. Changing jobs: Currently, employees cannot shift jobs without getting a No Objection Certificate (NOC) from the employer. Alternatively, they have to leave the country for two years before taking up a new job. The new provisions allow for a job changeover after the expiry of the fixed-term contract an employee enters into with the employer when taking up a job. But an NOC is required to change jobs during the contract period. Here again, the provisions have only been tweaked while the employer retains the power to hold back an employee. Other changes: Under the new system, employers will not be financially liable for their employees. For example, employers will not be responsible if employees incur huge debts and leave the country. Additionally, fines for confiscating travel documents have been increased to QR50,000 and labour law violations will be dealt with stern penalty. James Lynch, Researcher on migrants rights team, Amnesty International, considers the proposed reforms as a “missed opportunity.” In an earlier interview with Qatar Today, he said: “It is clear they will not alter the fundamental relationship between workers and employers, which is excessively skewed towards employers and gives rise to human rights violations.” As it always is, implementing reforms is a long journey and definitely not an easy one

TOURISM, CULTURE, RETAIL AND SPORTS

“WE ARE CHANGING OUR CULTURE FROM WITHIN, BUT AT THE SAME TIME WE ARE RECONNECTING WITH OUR TRADITIONS. IT IS IMPORTANT FOR US TO GROW ORGANICALLY.”

HE SHEIKHA AL MAYASSA CHAIRPERSON QATAR MUSEUMS

PROGRESS 2014-2015 TOURISM, CULTURE, RETAIL AND SPORTS

A CULTURE OF ART AND LEARNING

HE SHEIKHA AL MAYASSA BINT HAMAD AL THANI, CHAIRPERSON OF QATAR MUSEUMS (QM), WAS NAMED ONE OF THE WORLD’S 100 MOST POWERFUL WOMEN IN ART BY A LEADING INTERNATIONAL ART INDUSTRY WEBSITE IN 2014. SHE HAS BEEN INSTRUMENTAL IN STEERING QATAR MUSEUMS THROUGH ANOTHER EVENTFUL YEAR.

he year 2014 was an enviable year for Qatar on the cultural front. Two gigantic installations as part of its Public Art project were revealed last year. Richard Serra’s second public commission in Qatar, “East-West/West-East,” which spans the most expansive land area of any of his works, was launched in 2014. Its location near Zekreet Village is inspired by The Father Emir, HH Sheikh Hamad bin Khalifa Al Thani, who described the space as a place he remembered from his youth where herds of antelope once gathered. The artwork is now considered a landmark and one which is increasingly becoming a destination for residents of Doha and international visitors alike for weekend trips. The other equally impressive installation was Damien Hirst’s “A Miraculous Journey,” exhibited outside Sidra Medical and Research Centre, consisting of 14 monumental bronze sculptures chronicling the gestation of a fetus inside a uterus from conception to birth, ending with a statue of a 46-foot-tall anatomically correct baby boy. According to Qatar Museums, “one of the most important parts of our strategy is to bring culture to the streets of Doha on a huge scale with high impact and mass appeal in order to push the boundaries of the traditional museum model.” And these two monumental installations did push boundaries though the public responded with questions

about why international artists were being picked for such projects while local or even regional artists are ignored. Silencing these critics is the site-specific work displayed at the newly-opened Hamad International Airport, where Qatari artist Faraj Duham was commissioned to create large-scale murals, whilst artist Ali Hassan has produced an iconic desert horse sculpture installed in the departure lounge. A range of local artists including Mohammed Aljaida, Mubarak Al Malik, Amal Alatham and Yousef Ahmad will be producing works in the near future. One of the most obvious examples of the principle of public art in action is Hamad International Airport which opened this year. For the past five years, Qatar Museums has worked with local, regional and international artists to commission and acquire artworks for key locations in and around the site of the airport, offering a range of cultural experiences in this busy and vibrant public space. Eye-catching international installations have also featured as part of the plan. “Lamp Bear” by Swiss artist Urs Fischer is installed in a prominent location in the centre of the airport departures lounge and has attracted a huge amount of interest and interaction on social media. Dutch artist Tom Claassen has produced a series of sculptures of the Oryx which appear as a herd in the arrivals hall and which have received similarly positive responses. International artists including Dia Azzawi, Ahmed Al Bahrani, Keith Haring, Damien

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The public expresses art messages

Children partake in the art activities at the second edition of Mathaf’s Student Art Exhibition, ‘Black and White.’ Hirst and March Quinn, amongst others, will all contribute to the space. Other installations in public places, like Louise Bourgeois’ “Maman” at the Qatar National Convention Centre, interrupt people as they go about their daily lives, forcing them to reconsider and reassess their surroundings. “Collectively they provide a powerful presence. Our deliberate intention is to create an impact that is long-term and one which is as relevant and enjoyable to art lovers as it is to a wider audience,” says Qatar Museums about its intent to educate the people on art and bring in a culture of creating and appreciating art in multiple forms. According to Qatar Museums, during this past year there have been many examples of how culture can connect people both locally and regionally and can act as an important means to bring us all together. “To give a very immediate example, we celebrated Qatar Brazil 2014 in recognition of cultural links between our two nations. This included everything from an international fashion design competition for students; Brazilian representation during the Qatar International Food Festival in March 2014 in MIA Park; screenings of Brazilian movies in

116

Audience viewing the exhibition the Brazil Cinema Showcase; photographic exhibits and a trip to Brazil to demonstrate traditional Qatari cultural traditions,” an official of QM says. HERITAGE IS OF VALUE QM has also paid close attention to honouring the country’s historical past by protecting and documenting Qatar’s heritage. The ancient, cultural significance of the country’s history was fully recognized by the international community when in 2013 UNESCO designated the fortified ruins of the Al Zubarah Town as Qatar’s first world heritage site in recognition of its special cultural and physical significance. QM’s strong relationship with UNESCO was strengthened further this year when it hosted the 38th session of the World Heritage Committee in Doha in June. At the event, the Prime Minister HE Abdullah bin Nasser bin Khalifa Al Thani announced a QR36.4 million ($10 million) donation to a new fund to protect World Heritage sites. At the same event, HE Sheikha Mayassa highlighted the multiple threats facing World Heritage today and called on “all of the States of the big World Heritage family” to support Qatar’s initiative by “contributing to this newly created fund.”

PROGRESS 2014-2015 TOURISM, CULTURE, RETAIL AND SPORTS

visitors to the exhibition

Canon used during the reign of Tipu Sultan displayed at Tipu Sultan Exhibition at MIA PIONEERING MODERN ARAB ART Qatar Museums has built programmes and exhibitions designed to motivate local communities by embracing the present and future. Highlights included the opening of “Mona Hatoum: Turbulence” at Mathaf: Arab Museum of Modern Art located in Qatar Foundation, in February last year, in what was the artist’s largest solo exhibition to date in the Arab world, bringing to the forefront the diversity of her prolific, threedecade long oeuvre. This was then followed by a solo Etel Adnan show also at the same museum in March. Mathaf’s second Spring show truly highlighted the artist’s range by including many of Adnan’s paintings, drawings, tapestries, writings and films from the 1960s onwards. Both exhibits provided residents and visitors in Doha with unique insights into the work of two of the most successful contemporary visual artists of their generation. PERMANENT HOME FOR MODERN ARAB ART Mathaf: Arab Museum of Modern Art in Doha has dedicated the first floor of the museum to a new display of its permanent

Palanquin handle shaped with a tiger’s head, Sultanate of Mysore, India collection. Entitled Mathaf Collection, Summary, Part 1, it initially presented over 100 artists from the museum’s collection of more than 8,000 works that continues to grow with new acquisitions and commissions from Mathaf exhibitions. The dynamic collection includes works from Qatar and the Arab world, Iran, Turkey and other regions historically connected to the Arabian Peninsula, reflecting a multitude of artistic directions and contexts. This exhibition also contributes to developing research into the collection and its interconnections with contemporary cultures that is also present online in the Encyclopedia of Modern Art and the Arab World, developed by Mathaf with the intention of open sourcing knowledge and histories of modern Arab art from across the Arab world. Mathaf also presented “Shirin Neshat: Afterwards,” the first solo exhibition in the Middle East by the internationally acclaimed Iranian-American artist, Shirin Neshat, which runs until February 15, 2015. The exhibit features existing and newly produced works including the major photographic series “The Book of Kings” (2012) inspired by the epic poem Shahnameh (The Book

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PROGRESS 2014-2015 TOURISM, CULTURE, RETAIL AND SPORTS

Manal Al Dowayan’s Suspended Together, displayed at Mathaf. of Kings) by the revered Persian poet Ferdowsi, as well as a selection of video installations commenting on historical, cultural and political realities on which the artist has focused for the past 30 years. THE FLAGSHIP CULTURAL INSTITUTION This year, the Museum of Islamic Art (MIA) celebrated its sixth anniversary. The appeal and success of MIA’s expansive collection of Islamic masterpieces along with its gallery space, restaurants, views and exhibitions is evident in the growth in visitor numbers as well as the museum’s popularity with local schools, levels of engagement with communities of fans and followers online, and the increasing range and breadth of events being organised. Monthly and yearly visitor numbers to the museum have been increasing steadily since 2012, according to QM officials, and more than 1.5 million visitors have passed through its doors since it opened in 2008. MIA has welcomed more than 14,500 schoolchildren to

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Images from various exhibitions. its galleries and Education Centre in the last year through its Schools Outreach Programme, helping to take the museum into the heart of the community and teach young people about Qatar’s origins to illuminate its future. It has continued to play a vital role in developing the arts curriculum in schools as well as teacher training in arts education. MIA has introduced new, never-before seen objects to its collection. Currently this includes an exhibition that delves into the life and times of Tipu Sultan, the South Indian ruler, statesman, and patron. Drawn entirely from the MIA collection, it featured many objects which have never been displayed in Qatar. Another highlight this year was “Kings and Pawns,” an exhibition that perfectly demonstrated how so many of MIA’s masterpieces come from diverse societies - both secular and spiritual. Running for four months, it uncovered the history of board games in the Islamic world, from India to Spain between the 7th and 20th centuries

PROGRESS 2014-2015 TOURISM, CULTURE, RETAIL AND SPORTS

DESTINATION 2030 QATAR TOURISM AUTHORITY (QTA) ANNOUNCED AN AMBITIOUS STRATEGY THIS YEAR TO PUT THE COUNTRY ON THE GLOBAL TOURISM MAP. HERE ARE THE HIGHLIGHTS.

any favourable factors have been put forward while talking about the potential of Qatar’s tourism sector: its cultural heritage, central geographic location, expanding modern infrastructure, being the hub of an award-winning international airline, its business-friendly environment and reputation for hospitality. To put these different elements to work so that they come together to tell a complete and successful story, a road map was needed. The National Tourism Sector Strategy 2030 details the ways in which the government, the private sector and civil society can collaborate to help craft Qatar into a “world-class hub, with deep cultural roots”. The strategy has acknowledged that efforts need to be taken at almost all levels: awareness, marketing, investment, regulatory, planning, products and human capital. Some of the limitations that have been pointed out are the wide misconception that Qatar is solely a business destination, tourism offerings that are restricted to Doha, sub-optimal tourism institutional framework, lack of targeted tourism investments, lack of tourism-related educational programmes in schools and universities, etc. The strategy is an overarching one that serves to address these issues and more. TARGETS According to the World Travel and Tourism Council (WTTC), the tourism industry was responsible for 8.7% of the total global employment and contributed to 9.3% of the economy in 2012. In Qatar, however, these numbers have plenty of room for improvement. Just over 25,000 people (making up 1.8% of the workforce) are employed in the tourism sector in the country which directly contributed to 0.8% of the GDP. With the strategy in place, QTA hopes to boost these figures

considerably by 2030; the sector aims at making up 3.1% of the GDP, employing close to 127,000 people to serve the 6.7-7.4 million expected visitors (see chart 1). The visitors who were spending close to $1.3-1.4 billion in 2012 will be spending a little less than $11 billion in 2030, according to the figures extrapolated by Euromonitor, World Bank, WTTC, QTA and Booz & Company. Another noticeable shift in the balance that QTA will be working towards is the mix of Arab and international tourists as well as business and leisure tourists.

The National Tourism Sector Strategy 2030 was developed, following a nation-wide consultative process, as an integrated effort to advance Qatar’s tourism industry and to draw the world’s attention to the country’s growing tourism offering across culture, family, entertainment, business, sports, health and wellness, ecotourism, and education.” ISSA BIN MOHAMMED AL MOHANNADI Chairman Qatar Tourism Authority

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PROGRESS 2014-2015 TOURISM, CULTURE, RETAIL AND SPORTS

PROJECTED TOURIST ARRIVALS IN QATAR (IN MILLIONS) 6.7 - 7.4

+11%

1.2 2012

2.8 - 3.1

1.5 - 1.7

2015

2020

3.8

2022

4.5 - 4.9

2025

2030

Euromonitor, World Bank, WTTC, Qatar Tourism Authority, Booz & Company analysis

PROJECTED TOURIST ARRIVALS IN QATAR BY COUNTRY OF ORIGIN 2015

2020

2022

2025

2030

GCC Arrivals ~70%

2012

~67%

~58%

~50%

~44%

~36%

Non-GCC Arrivals

~33%

~42%

~50%

~56%

~64%

~30%

Euromonitor, World Bank, WTTC, Qatar Tourism Authority, Booz & Company analysis

PROJECTED BREAKDOWN OF TOURIST ARRIVALS IN QATAR BY PURPOSE OF TRAVEL 2012

2015

2020

2022

2025

2030

Business

~73%

~67%

~54%

~46%

~42%

~36%

Leisure

~27%

~33%

~46%

~54%

~58%

~64%

Qatar’s National Tourism Sector Strategy Sector Economic Impact Model; Booz & Company analysis

PROCESS The strategy is meant to develop the tourism industry in line with four guiding principles. It must be in harmony with local traditions and values It must align with the national agenda It must create a positive economic impact And, it must be environmentally responsible The fundamental objective of the strategy is to establish proper governance; comprehensive plans, policies and regulations for product development; and promotional efforts to build on. Public-Public and public-private partnerships will help enhance key enablers like develop brand identity, establish research and statistical capabilities, simplify visa procedures for tourists, etc. Sectoral capacity building is another important objective; QTA aims at attracting the best talent from across the globe to help develop the sector and aid in knowledge transfer as well as grooming a new generation of home-grown talent. QTA will also work on diversifying its tourism product and service portfolio by capitalising on areas where it already has a competitive advantage, like MICE,

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cultural and urban tourism, to expand other high-potential offerings like sports, “sun, sea and sand”, health and wellness, nature and educational tourism. The strategy has identified several high-impact programmes in each of these areas to be implemented by 2018. The end-product that we will have in 2030 will have an optimal market mix of business, Arab tourists seeking comfort and wellbeing, Arab families seeking leisure and entertainment, wealthy world travellers, nature lovers and sports and entertainment enthusiasts. QTA predicts that this will require an investment of around $40-45 billion before 2030. IN THE SHORT TERM The strategy has laid down several tangible milestones that have to be achieved by 2018. These include Achieving a rank of at least 35 on the Travel & Tourism Competitiveness Index Increasing tourism’s contribution to GDP to $3.1 billion; Reaching 2.4 million international and 1.7 million local inbound tourists Achieving 10% annual growth in business tourists and welcoming at least 1 million leisure tourists who’d primarily be drawn to the country’s cultural offerings Achieving at least $4.2 billion of investment in the public and private tourism sector while ensuring adequate levels of return on investment By promoting greater and well-planned tourism, the National Tourism Sector Strategy 2030 will help the country diversify its economy and reduce its considerable reliance on energy resources. It will also help expand the economy, boost the contribution of the tourism sector to the GDP, grow the number of SMEs, encourage entrepreneurship and a greater role for the private sector in the economy, and provide Qataris with the opportunity to be part of an exciting and fastevolving sector. The strategy will also bring about numerous social benefits, whether in terms of providing greater opportunities for family-friendly leisure and recreation, ensuring the equitable and balanced development of all municipalities and regions in Qatar, improving access to transportation, strengthening the country’s ability to host world-class international events, including the World Cup 2022, empowering and promoting the work of local artisans, or offering young Qataris the chance to be part of an exciting and fast-evolving industry. Most importantly, the Strategy will help uphold and promote the Qatari culture and values, while concurrently providing the chance to ensure a prosperous and thriving future for the generations to come, in line with Qataris’ long-standing commitment to inter-generational equity

NATIONAL DAY CELEBRATED Patriotic fervour coupled with pomp and gaiety marked the National Day celebrations in Qatar. The main event, which was held at the Corniche, was attended by The Emir, HH Sheikh Tamim bin Hamad Al Thani, Father Emir, HH Sheikh Hamad bin Khalifa Al Thani, Ministers, Ambassadors from various countries, and other dignitaries. The crowd went into raptures as The Emir and Father Emir walked down the Corniche to mingle with the residents. The Father Emir allowed people to drape him with scarves while The Emir greeted children and youth with smiles, and cheers could be heard as the pair made their way down the waterfront.

Qatar made history by winning the U-19 Asian Football Championship held in Myanmar, the GCC Cup for the third time, and also defeated Australia in a friendly soccer match for the first time. On the other hand, major international events such as the 12th FINA World Swimming Championships (25m) were held in Doha between December 3 and 7.